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Inter-country differences and HRM practices

Globalization and the destruction of time and space.

The rapid growth of global business started with the emergence of the industrial revolution.

ith the invention of machines li!e the spinning "enny and the complete move from manuallabor to mechanical production resulted to the availability of then #handmade$ hand crafted

hand woven things% such as dresses. In addition availability of the means of transportation

such as railroads and steamships made the raw materials easily available for manufacture and

allowed for the finish product to be transported and distributed through these means.ith the start of the &'thcentury$ the rise of technology became a game changer. (igger

machines were built and this allowed more things to be produced. The pioneer company that

subscribed to the idea of #going global% was the )ord Motor *ompany. The idea was

relatively simple-to move from a regional concentration to a global one. In the +& st century$

technology has ta!en the global HRM through leaps and bounds. There is a rising trend of the

use of technology to conduct business. Global companies must now deal with the destructionof the traditional parlance of time and space.

The (anes and (oons of International Human Resource Management

International Human Resource Management$ according to *ascio +,&,$ is a subect worthy

of attention because of two things the first is scope and then heightened ris! e/posure. He

further discuses that the scope of the Human Resource is already broad but when ta!en out of

the confines of the home country it is forced to deal with many changes and challenges. The

second$ heightened ris! e/posure$ refers to the variety of legal issues that could be faced by

an HR$ in addition these different legalities can constraint or can enforce an HR practice.

0erceived Global *hallenges

1essler +,,2 points out three perceived global pressure of international companies. The first

is deployment. This global pressure deals with 3uestions such as who can be recruited into a

global company$ how much e/penses will his deployment carry4 The second is !nowledge

and innovation dissemination$ global companies must now cope with the growing demand of

information and innovation which can change very rapidly. 5ast is identifying and

developing talent on the global basis within this area falls the 3uestion of what sort of

training will be appropriated to give the company an edge over others4 6f course these arerelatively broad aspects of the global pressures.

Inter-*ountry 1ifferences that 7ffect HRM 0ractices

*ultural )actors

In a study conducted by a 1utch researcher$ Geert Hofstede$ there are five maor dimensions

of cultural variance. He analyzed a total of &&8$,,, 3uestionnaire completed in +, languages.

These five were9 power distance$ masculinity versus femininity$ uncertainty avoidance$

individualism and long term versus short term orientation.

&. 0ower 1istance refers to how less powerful members of the wor!force readily accept

the une3ual distribution of power. The study of 0rof. Hofstede found out that the

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countries with the top power distance culture were Malaysia$ Guatemala and the

0hilippines :notice the typical 0hilippine telenovela line9 rich-girl-poor-boy; while

those with the lowest were 7ustria$ 1enmar! and Israel.+. Masculinity versus )emininity refers to societal orientation of assertiveness and

aggression versus being subtle and caring. The study found out that the most

masculine cultures were "apan$ 7ustria and orway and >ew ?ealand.@. Ancertainty 7voidance refers to the e/tent through which a culture allows fle/ibility

or better yet- the ability of a culture to deal with the #une/pected%. *ountries that

prefer rules$ structure and no deviation are 0ortugal$ Greece$ (elgium and "apan.B. Individualism refers to the e/tent through which people are allowed to do things on

their own. The most individualist countries include the Anited =tates of 7merica and

other Cnglish spea!ing countries. :note the ideological similarities;D. 5ong term versus =hort term orientation refers to how a culture programs people to

wait for gratification. 5ong term oriented countries include Taiwan$ Hong Eong$

>igeria$ 0a!istan and the 0hilippines

7nother author$ ayne *ascio$ Managing Human Resources presents &, brief points of cultural

variable that have a profound effect on HR practices. These are9

&. =ense of =elf and =pace+. 1ress and 7ppearance@. )ood and )eeding Habits

B. *ommunication and 5anguageD. Time and Time *onsciousness

8. Relationships2. ormsF. (eliefs and 7ttitudes

'. or! Motivation and 0ractices&,. Mental 0rocesses and 5earning

How to avoid conflict in a culturally diverse global wor!place

&. *onduct 1iversity Training+. (e genuinely Interested in the culture of other people

@. 5earn the culture of the employeesB. *reate a responsive feedbac! mechanism for employeesD. Treat situations li!e racist comments and se/ist attitudes seriously

Cconomic )actors

1ifferences in economic systems due to difference in beliefs also translate to inter-country

differences in HR practices. *ountries that are more conservative tend to view profit and

growth as the most important goals. These countries may have strict protectionism that can

hamper the penetration of a foreign company. =uch is the case in the Curopean Anion$ inwhich if you are not a member you will have a hard time finding a trading partner thereby

causing a great delay in the establishment of your company. In addition$ there are also

countries which still subscribe to the policies of self-growth such as what is done by the

Eingdom of =audi 7rabia through the =audization 0olicy.

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*ountries that are more liberal or even more radical tend to favor productivity$ efficient

wor!ers and staff cutting where mar!et forces dictate some countries even go to the e/tent of

subscribing to policies that must$ at all costs$ prevent unemployment

The Inde/ of Cconomic )reedom is an annual international inde/ and ran!ing created by The

Heritage )oundation and The all =treet "ournal in &''D to measure the degree of economicfreedom in the worlds nations. It uses the approach similar to that of 7dam =mith in his

wor! The ealth of >ations. This inde/ had been used to assess the efficacy of a country for

business. It scores ten broad factors among them include business freedom$ monetary

freedom$ trade freedom$ investment freedom and financial freedom.

7ccording to the +,&B Inde/ of Cconomic )reedom the top si/ country with the most

economic freedom include Hong Eong$ =ingapore$ 7ustralia$ =witzerland$ >ew ?ealand and

*anada while the countries with the least economic freedom includes Iran$ Critrea$

orth Eorea.

5abor *ost )actors

5abor cost is the overall costs to a company associated with one employee$ including wages$

benefits$ ta/es and insurance.

Recruiters and human resources managers have to ta!e labor costs into account in every

aspect of their obs.How much the department or hiring manager can pay for an employee will be important in

everything an organization does from the ob description$ the ob title$ the way the ob ismar!eted to applicants$ the type of candidates the recruiter can see! out and the offers they

can ma!e to those candidates.5abor costs are generally the highest e/penditure for most businesses$ as they incorporate the

sum total of all human related wor! needed for company operations.

Clements of 5abor *ost )actors

&. =alary- i.e. how much is the company is willing to pay to ac3uire employees4+. (enefits- i.e. what benefit pac!age can be offered by the company to attract

international employees4@. 7dministrative *osts- i.e. what other costs is the company willing to ta!e on4

C/ample9 In terms of salary$ the following countries have the cheapest labor costs.

&. Madagascar :,.&F per hour;+. (angladesh :,.+@ per hour;@. 0a!istan and Ghana :,.@+ per hour;B.

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companies. There are also countries that dictate the course of how a company is to treat its

employees and especially the union. =uch is the case in Germany where the Government

issued a codetermination policy that legally re3uires the company to wor! with the union and

the employees to reach a consensus as regards to company policy. The 0hilippines on the

other hand can be classified as a moderate$ since it prescribes rule that protects the interest of

both the company and the employees as long as it is fair under the law.

The role of Anions cannot as well be shunned to the sidelines$ with the emergence of the

concept through Earl Mar/$ Anions have served to protect the interest of the wor!ers. Here

are some of the most powerful 5abor Anions in the orld9

&. 7ll-*hina )ederation of Trade Anions :7*)TA;+. *ongress of =outh 7frican Trade Anions :*6=7TA;@. General *onfederation of 5abor :*GT;- )ranceB. IG Metall- Germany

D. Tunisian General 5abor Anion :AGTT;

6n a final note. . .

7ccording to *ascio +,&, and 1essler +,,2$ in order to ta!e advantage of the international

mar!et companies must9

&. >ot e/port head3uarters-country bias+. Thin! in global terms@. Recognize that no country has all the answers

References9

1essler$ Gary Human Resource Management +,,2

*ascio$ ayne Managing Human Resources +,&,

www.wi!ipedia.com

www.heritage.com

www.foreignpolicy.com

www.recruiter.com

0repared by9 1eanne Mitzi =omollo