Cross cultural management 3e by cullen ch11

11 Chapter HRM in the Local Context: Knowing When and How to Adapt Copyright© 2004 Thomson Learning All rights reserved Learning Objectives •• Understanding Understanding how how the the national national context context affects affects HRM HRM practices practices •• Identify Identify how how recruitment recruitment and and selection selection practices practices differ differ inin various various national national contexts contexts •• Identify Identify possible possible host host adaptations adaptations inin recruitment recruitment and and selection selection practices practices Copyright© 2005 South-Western/Thomson Learning All rights reserved Learning Objectives •• Identify Identify how how training training and and development development techniques techniques are are used used inin different different countries countries •• Identify Identify sources sources ofof high-quality high-quality workers workers inin different different nations nations •• Understand Understand how how training training must must be be adapted adapted toto host host country country workers workers •• Identify Identify how how performance performance evaluation evaluation and and compensation compensation practices practices differ differ inin various various national national contexts contexts Copyright© 2005 South-Western/Thomson Learning All rights reserved Learning Objectives •• Identify Identify possible possible host host country country adaptations adaptations inin performance performance evaluation evaluation and and compensation compensation practices practices for for aa multinational multinational company company •• Understand Understand how how labor labor costs costs vary vary •• Have Have an an appreciation appreciation ofof how how the the national national context context and and historical historical conditions conditions affect affect the the relationship relationship ofof management management and and labor labor Copyright© 2005 South-Western/Thomson Learning All rights reserved Why Do Nations Differ in HRM? •• Because Because ofof the the national national context context •• National National culture culture and and social social institutions institutions influence influence how how managers managers make make decisions decisions regarding regarding strategies strategies •• Countries Countries vary vary widely widely with with regards regards toto social social institutions institutions and and national national culture culture •• Multinationals Multinationals must must select select and and implement implement practices practices that that meet meet national national context context Copyright© 2005 South-Western/Thomson Learning All rights reserved Exhibit 11.1: How the National Context Leads to National Differences in Local HRM Practices Copyright© 2005 South-Western/Thomson Learning All rights reserved Why Do Nations Differ in HRM? •• Resource Resource pool: pool: all all the the human human and and physical physical resources resources available available inin aa country country •• Both Both from from natural natural and and induced induced factor factor conditions conditions •• Include Include quality quality ofof labor, labor, availability availability ofof scientific scientific laboratories laboratories Copyright© 2005 South-Western/Thomson Learning All rights reserved Key Factors that Influence the Resource Pool •• •• •• The The quality, quality, quantity, quantity, and and accessibility accessibility ofof raw raw material material The The quantity, quantity, quality, quality, and and cost cost ofof personnel personnel available available The The scientific, scientific, technical, technical, and and market-related market-related knowledge knowledge available available toto firms firms Copyright© 2005 South-Western/Thomson Learning All rights reserved Resource Pool •• The The cost cost and and amount amount ofof capital capital available available toto firms firms for for operations operations and and expansion expansion •• The The type, type, quality, quality, and and costs costs ofof supporting supporting institutions institutions such such as as the the systems systems ofof communication, communication, education, education, and and transportation transportation Copyright© 2005 South-Western/Thomson Learning All rights reserved Why Do Nations Differ in HRM? •• Natural Natural factor factor conditions: conditions: national national resources resources that that occur occur naturally naturally •• E.g., E.g., abundant abundant water water supply supply •• Induced-factor Induced-factor conditions: conditions: national national resources resources created created by by aa nation nation •• E.g., E.g., superior superior educational educational system system Copyright© 2005 South-Western/Thomson Learning All rights reserved Compensation in the U.S •• Wages Wages and and salaries salaries differ differ based based on on two two major major factors factors •• External: External: include include local local and and national national wage wage rates, rates, government government legislation, legislation, and and collective collective bargaining bargaining •• Internal: Internal: include include the the importance importance ofof the the job job toto the the organization, organization, its its ability ability toto pay, pay, and and the the employee’s employee’s relative relative worth worth toto the the business business Copyright© 2005 South-Western/Thomson Learning All rights reserved Compensation: Japan •• Traditional Traditional approach approach •• Base Base salaries salaries on on positions positions •• Skill Skill and and educational educational requirements requirements •• Age Age •• Marital Marital status status and and family family size size may may count count •• Bonus Bonus system: system: employees employees often often receive receive up up toto 30% 30% ofof their their base base salary salary during during traditional traditional gift-giving gift-giving seasons seasons Copyright© 2005 South-Western/Thomson Learning All rights reserved New Merit (Japanese style) •• Can Can affect affect pay pay raises raises toto aa greater greater degree degree than than traditional traditional position/seniority position/seniority system system •• Nenpo Nenpo system: system: based based on on yearly yearly performance performance evaluations evaluations that that emphasize emphasize goals goals •• Although Although goals goals are are not not always always the the same same as as inin Western Western companies companies •• Stresses Stresses attitudes attitudes as as much much as as performance performance Copyright© 2005 South-Western/Thomson Learning All rights reserved Exhibit 11.15: The Japanese Pay Raise Formula: Changing the Balance Copyright© 2005 South-Western/Thomson Learning All rights reserved Implications for the Multinational: Performance Evaluation and Compensation •• •• Match Match HRM HRM orientation orientation Seek Seek location location advantages advantages inin wages wages Copyright© 2005 South-Western/Thomson Learning All rights reserved Exhibit 11.17: Labor Costs and Hours Worked Per Week in Selected Countries Copyright© 2005 South-Western/Thomson Learning All rights reserved A Comparative View of Labor Relations •• Patterns Patterns ofof labor labor relations relations depend depend on: on: •• Historical Historical factors factors •• Ideology Ideology reasons reasons •• Management Management views views ofof unions unions Copyright© 2005 South-Western/Thomson Learning All rights reserved Union-Membership Density •• Proportion Proportion ofof workers workers inin aa country country who who belong belong toto unions unions •• Germany: Germany: estimated estimated 40% 40% belonged belonged toto trade trade unions unions •• U.S.: U.S.: 14.2% 14.2% ofof nonagricultural nonagricultural workforce workforce •• Denmark: Denmark: over over 80% 80% unionized unionized •• Great Great Britain: Britain: approximate approximate 50% 50% unionized unionized Copyright© 2005 South-Western/Thomson Learning All rights reserved Exhibit 11.18: Union Density in Selected Countries Copyright© 2005 South-Western/Thomson Learning All rights reserved Historical and Institutional Differences: Germany •• Germany Germany •• Formalized, Formalized, legalistic, legalistic, and and low-conflict low-conflict bargaining bargaining between between unions unions and and large large corporations corporations •• French French •• Militant/strong Militant/strong ideologies ideologies •• U.S U.S •• “Bread “Bread and and butter” butter” issues: issues: wages, wages, benefits, benefits, and and working working conditions conditions Copyright© 2005 South-Western/Thomson Learning All rights reserved Union Structures •• Enterprise Enterprise union: union: represents represents all all people people inin one one organization, organization, regardless regardless ofof occupation occupation or or location location •• Craft Craft union: union: represents represents people people from from one one occupational occupational group, group, such such as as plumbers plumbers •• Industrial Industrial union: union: represents represents all all people people inin aa particular particular industry, industry, regardless regardless ofof occupational occupational type type Copyright© 2005 South-Western/Thomson Learning All rights reserved Union Structures (cont.) •• Local Local union: union: represents represents one one occupational occupational group group inin one one company company •• Ideological Ideological union: union: represents represents all all types types ofof workers workers based based on on some some particular particular ideology ideology or or religious religious orientation orientation •• White White collar collar or or professional professional union: union: represents represents particular particular occupational occupational group, group, similar similar toto craft craft union union Copyright© 2005 South-Western/Thomson Learning All rights reserved Exhibit 11.19: Popular Form of Unions in Selected Countries Copyright© 2005 South-Western/Thomson Learning All rights reserved Implications for the Multinational: The Search for Harmony •• •• Must Must deal deal with with local local labor labor practices practices AAfactor factor inin location location choice choice Copyright© 2005 South-Western/Thomson Learning All rights reserved Exhibit 11.21: Who Gets Along? Copyright© 2005 South-Western/Thomson Learning All rights reserved ... cultural cultural expectations expectations for for selection selection practices practices Types Types ofof jobs jobs favored favored by by applicants applicants Laws Laws and and cultural cultural... Induced-factor Induced-factor conditions: conditions: national national resources resources created created by by aa nation nation •• E.g., E.g., superior superior educational educational system system Copyright©... historical historical conditions conditions affect affect the the relationship relationship ofof management management and and labor labor Copyright© 2005 South-Western/Thomson Learning All rights reserved