Unit 3
Unit 3
Unit 3
3.1 INTRODUCTION
The chapter examines the ramification of the contextual factors that play a
significant role in HRM activities in the seven major economies. These
countries represent a fair picture as they sample the countries from fully
developed to developing economies. As every country has its unique set of
cultural diversity, the contextual factors also differ from country to land in a
significant way. A wide array of human resource management and
management techniques and styles in these nations presents a diverse and
complex world in which multinational corporations must operate and survive.
Most MNCs are home to the most economically advanced nations but operate
in many different countries. Emerging economies benefit from foreign direct
investment from MNCs from financially progressive governments. As such,
best practices are constantly flowing between these countries.
Developed Countries:
• United State of America (USA)
• Japan
• United Kingdom (UK)
Developing Countries:
• Turkey
• India
• The Middle East
• China
Japanese are loyal to the groups with which they are affiliated and are ready
to sacrifice their interest in favor of the group interest. A collectivist approach
is evident when comparing Japan within the group to the UK, a country of
individualism and collectivism. In the UK, the ingroup includes the proximal
nuclear family: spouse, children, guardian, or parents. Within the Indian
group are close relatives and extended families, grandparents, siblings,
sisters, uncles, aunties, nephews, nieces, companions, and family members.
While in the context of Japan, the above is included in addition to the
organization to which you belong.
Japanese people are diligent and have a strong sense of duty or indebtedness.
Japanese society lacks a western style horizontal social class system, while it
has a vertical stratification by the institute or group of institutes. These
structures are found in employee unions. Trade unions are company based.
At the same time, they compared it with the UK, where trade unions are
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International based on professional skills and between companies and organizations. The
Human Resource
Management : An characteristics of Japanese unions and management are based on corporate
Overview culture, and relationships are based on cooperation and harmony.
Depending on the age and educational background, workers' salaries are low
and rise gradually until they retire. Age-appropriate wages and promotion
systems strengthen the long-term employment system. However, wages are
not dependent on performance. Performance-based factors prevent
complacency through job security through awards and bonuses. Additional
financial incentives accrue up to 1/3 of earnings.
A focus on personal freedom and success means that individuals are free to
pursue careers and change jobs to achieve success. As also implies,
organizations can hire and fire people according to their needs or market
conditions. Organizations are also free to pursue their success. Most
American companies hire based on a particular job need. As there is a limited
commitment between the employer and the employee, the job and skills
required for the specific job are clearly defined for the job. In organizations
like participatory management, bosses are friendly, and subordinates are
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International willing to question the authorities. On the one hand, employees are open to
Human Resource
Management : An any uncertainty associated with the job, contrasting to other nations. This, in
Overview turn, facilitates decision-making, risk-taking, and the entrepreneurial go-
getter spirit while promoting competitiveness.
There is a dislike for rules and regulations in the American culture, but at the
same time, they are in place in the organization and society. Roles and
functions are clearly defined and legally enforced on the employees through
business contracts. Laws are drafted under the constitution to prevent the
misuse of power by the employer. The bureaucratic model provided by
Weber (1947) acts as a model of professionalism. Professionalism is also
mirrored in their business education. The established interactive management
system based on objective (MBO) is prevalent in American organizations.
This drives better performance, increased company visibility, and employee
engagement with the organization.
On the contrary, it leads to incredible bureaucracy and overproduction.
American organizations have the highest working hours, productivity, and
employee training costs. Employee training is always taken very seriously
despite leaving the organization for a better prospectus.
Most of the MNCs follow ethnocentric policies for HRM. A slight deviation
from the centrally determined strategy is accepted, keeping the view of the
requirements of the host countries. The local managers also have some
autonomy to modify strategy implementation.
A study by Hofstede (1980) found that the UK scored lower on the power
divide than other countries. They are different from their superiors inside and
outside of the workplace. People care more about their liberty than equality.
Authorities are questioned, but it is done subtly and indirectly through
confrontation. In most cases, the argument is wrapped up around humor.
People do not like to be ordered or dictated, but authority is respected when
used well.
Similar qualities are seen in the association, as they are leveled and unified.
Paternalistic, dictator, the initiative style across various associations, follows
the executive’s style. Subordinates hope to be counseled yet don't anticipate
participating in the dynamic cycle as equivalent accomplices. More
established individuals stand firm in senior situations. Advancement and pay
depend on devotion to the chiefs instead of occupation execution. Be that as
it may, things are changing as a more current age acquaints western-style the
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board rehearses with the association. Cross-Cultural
Diversity
The Bedouin tradition ‘Majlis’ of holding the council meeting has been
carried over to the organization. Managers and workers from different levels
get together and convey through private contact, discussion, and systems
administration. Written letters and memos are avoided.
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One of the fundamental aphorisms that guide the Chinese culture is the Cross-Cultural
Diversity
philosophy of ying-yang, which acknowledges the simultaneous presence of
inverse qualities and convictions inside an individual. Because of these ethics
and values, the Chinese are collectivist and lean toward the group.
Frequently, they show individualistic inclinations also. They are not a part of
in-groups. They have a tenacity of personalized loyalty and this lack
organizational belief. Personal networking is essential to gain cooperation
and get things done, but this behavior is not duplicated in more prominent
organizations but can be found in smaller organizations.
There is a lack of discipline and willingness of the supervisors to control
employee behavior; consistency in performance and follow-through are
rarely maintained. Managers leaving the organization often convince their
subordinates to join them. Also, some employees stay in the organization
because they have a strong relationship with their superiors.
There have been no independent trade unions, and trade union leaders are
often political party personnel with much say in the organization’s
performance. This has many implications for employee behavior at the
workplace. Government has a lot of control and influence on the life of the
people and their daily affairs. The government extends this control even
during the recruitment process of the organization.
Managers who have survived the cultural revolution are not proactive or
settle on intense choices and have no free feelings. There is reluctancy
associated among managers to share information or make a risky decision.
There is a tenacity in maintaining political relationships instead of achieving
organizational goals. Problems are ignored till they cannot be overlooked,
and most of the time, the solutions are based on precedent involving veto of
power by the authority. Managers depend on rules and methods. While
acquiescence, impulse control, and acknowledgment of social commitments
are empowered, decisiveness and innovativeness are frequently overlooked.
This is fundamental because of the school system, where students are
pinpointed on their way of thinking and do not have a say. It is a hierarchical
society where status is regarded. Managers are making a couple of decisions
and not being considered accountable, and the instability of the world of
politics.
But with the passage of time and the changing workforce, practices have also
changed. The newer generation is tolerant, assertive, and lenient about
observing rules and regulations.
The cultural environment plays a significant role in the way managers run
their organization while managing the employees they are situated in. MNCs
are also not exempted in this regard. They have to consider the socio-cultural
environment before implementing organizational practices. Managers need to
adjust and change their HRM practices and approaches because of the
national characteristics of different nations and regions where they work. A
similar transformation and change are pertinent when homegrown single-
country organizations adapt foreign best practices to improve performance.
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