Global Sustainability and Cross-Cultural Challenge - Essay Example

Global Sustainability and Cross-Cultural Challenge Professor’s Name University The City and State Date Table of Contents Table of Contents 2 Global Sustainability and Cross-Cultural Challenge 2 1. Introduction 2 2. National culture 3 2.1 Hofstede’s national culture dimensions 4 3. The influence of national culture on business negotiations 5 3.1 Meeting protocols 5 3.2 Risk taking and decision making 6 4. The influence of national culture on HRM practices 6 4.1 Recruitment and Selection 7 4.2 Performance appraisals and pay and benefits 7 5. Conclusion and recommendations 8 References 10 Appendices 11 Global Sustainability and Cross-Cultural Challenge 1. Introduction Globalization is a reality in today’s businesses world. Businesses are no longer dealing with domestic customers, suppliers, employees, or shareholders as it was a few decades ago. Most successful companies in the current world operate globally in different geographical markets. The economic globalization has resulted in the integration of global economies through the decline of obstacles to the movement of technology, people, and capital. Nonetheless, the world remains a totally different place as each country and region share varying cultures that are significantly at play in the businesses world as well. As businesses adopt global expansion strategies, they should be aware of cross-cultural differences to enable increased sustainability. Globalization necessitates effective management of diversity and cross-cultural literacy. Alertness to cultural differences is gradually important to the success of multinational corporations. Businesses operating outside their domestic markets and countries face numerous cross-cultural challenges in terms of HRM practices as well as how to work in foreign. The following essay attempts to critically compare the effect of Hofstede’s national culture dimensions in the UK and that of India.it will focus on discussing how the national cultures vary when it comes to negotiation behaviors and HRM practices in the two countries. All though the critical analysis, it will be clear that cross-cultural awareness is essential for pursuing a global strategy. 2. National culture Culture is a word derived from the Latin word “cultura” that refers to cultivate. In simpler terms, culture means that values, norms that are shared between groups of individuals such as they manner in which people think, interact, and act with each other. It is a wide concept that explains the basic things in human behaviors and mentality such as tradition, language, style, and approaches. As such, different countries share distinctive beliefs, values, and practices. National cultures are defined by the shared values, behaviors, and attitudes defined by territorial boundaries (McFarlin & Sweeney, 2013, p. 23). People within in each country share numerous beliefs, attitudes, and behaviors towards management and business styles. Most employees tend to rely on their personal beliefs, attitudes, and values rather than new one developed through organizational cultures. Therefore, national culture plays a greater role on determining employees’ behaviors than does for an organization’s culture. Therefore, understanding the national culture is important in ensuring that an organization understands the basic cultural distinctiveness of employees outside their own country. 2.1 Hofstede’s national culture dimensions Numerous cultural theories and cross-cultural frameworks have provided avenues for analyzing national culture. The most substantial and widely applied cultural theory is Hofstede’s five cultural dimensions. Hofstede assume four cultural dimensions including power distance, uncertainty avoidance, individualism/collectivism, and masculinity/femininity (Hofstede, 2001). The cultural dimensions are based on the premise that cultural patterns are founded in the value systems of sizable groupings of the populace and that they become established over extended periods in history. These dimensions are used to gauge how far each dimension is important to a country in terms of their behaviors or culture. Therefore, it can be a significant evaluation tool on how managers and employees are likely to behave or make decisions. Nonetheless, Hofstede’s cultural theory has come under increased criticism due to the number of inadequate or partial cultural dimensions that lack to capture the depths of national environments. Moreover, his theory has also been viewed as merely statistical concepts founded on collections of responses that lack a comprehensive understanding of the fundamental processes (McFarlin & Sweeney, 2013, p. 123). Nonetheless, Hofstede’s cultural dimensions will offer an opportunity to critically compare the cross-cultural differences in terms of business negotiation behaviors and HRM practices between the UK and India. 3. The influence of national culture on business negotiations Negotiations simply refer to a form of problem solving that is based on finding peaceful ways of resolving disputes. Businesses involved in negotiations face varying problems that require an amicable resolution or outcome in the end. Negotiations are a peaceful platform for businesses or parties to describe, understand, and discuss their ideas, issues, as well as facts to resolve business problems (Metcalf, et al. 2006, p. 386). Therefore, negotiations demand for an increased understanding of the other parties involved to ensure that the best outcome is reached. Culture significantly plays a key role in determining negotiation behaviors since cultures vary across countries. Thus, it is important to understand the cultural uniqueness of each nation to successfully engage in effective negotiations. 3.1 Meeting protocols Negotiation behaviors are characterized by numerous factors that range from communications to risk taking among others. The UK and India represent two different cultures that are also unique in terms of how each country approaches negotiations. Meeting protocols is the manner or procedure in which negotiation meetings are to be carried out. This involves the cultural dimension of uncertainty avoidance. The UK has an uncertainty avoidance score of 35, which relatively low meaning they do not take everything seriously (Metcalf, et al. 2006, p. 389). This means that UK businesses people are not strict on procedures and are comfortable even in casual negotiations. The same case applies for India, which has a low uncertainty avoidance score at 40, meaning they are not threatened by unambiguous situations (Appendix 1). Nonetheless, Indians do not prefer to go directly down to business as they desire to develop personal relationships with other parties before negotiating. This is however not the case for UK, which prefers to directly get down to business as time is viewed in the context of money. 3.2 Risk taking and decision making Again, when it comes to taking risks, India and the UK are similar. This is because they have a low rating of uncertainty avoidance, which implies that individuals from both countries are increasingly willing to take risks related to the unknown. However, there is a big difference in terms of decision making in negotiation processes. The UK has a rating of 35 on the power distance cultural dimension (Appendix 2). The UK society believes that everyone was born equal and that anyone is free to pursue what it is they desire without facing inequality or lack of opportunities (Metcalf, et al. 2006, p. 392). In such a case, the decision making can be made by anyone or through consensus. However, India has a power distance of 77 which is way above the world average of 50 illustrating a hierarchical order (Appendix 1). India has numerous inequalities that clearly separate the powerful and rich from the poor. This means that most senior executives are the most respected individuals in the organization meaning that they make all the final decisions (Metcalf, et al. 2006, p. 392). 4. The influence of national culture on HRM practices HRM practices focuses on the sensitive process of investing in humans to effectively meet strategic organizational goals. The most valued assets of any organization are its employees and investing in their enhancement, productivity, and motivation cannot be undermined. With increased globalization, HRM practices have shifted from an adapted approach to a universal approach. Traditional HRM practices were established on the basis of different organizational and national transformations over time. These adapted HRM practices did not recognize culture as a substantial factor in effective management of human resources (Schneider, 1988, p. 102). However, with increased globalization, the factor of culture and diversity has found its way in HRM practices. Multinationals operating in different countries has to develop specific HRM practices based on national cultures to effectively achieve HRM goals and objectives. 4.1 Recruitment and Selection HRM practices differ across national cultures. Recruitment and selection is a challenging task for any organization as each seeks to attract the best talent from the skills pool. In the UK, recruitment and selection follows a formal and well-laid out procedure. All recruitment and selections are transparent, open, and inclusive meaning that all people of different ages, races, ethnicity, and skills get a fair opportunity at employment. Moreover, the UK has comprehensive recruitment and selection policies and procedures. This is because the UK has a low power distance that means there are equal opportunities for everyone. Moreover, the UK has an individualism score of 89 that means that people only care about their personal needs and desires (Appendix 2). Therefore, personal achievement is essential illustrating increased competition for jobs. Nonetheless, in India, the population is full of inequalities with a high power distance of 77 (Appendix 1). Most businesses are based on family structures and most senior positions will go to family members. Furthermore, recruitment and selection is faced with increased prejudice based on the power differences among people in society. Additionally, India’s society is highly collectivists, meaning that people form strong relationships and expect each to take care of each other (Amba-Rao et al. 2000, p. 65). As such, most family based-businesses tend to select their fellow family members even if they are not competent for such positions. India has no formal recruitment and selection policies or best practices especially for senior positions. 4.2 Performance appraisals and pay and benefits In terms of performance appraisal, the UK illustrates an open and fair process of appraisal. Performance appraisals are offered under the merit of individual performance in the workplace. Due to the low power distance, UK managers adopt an open door policy or appraisal system that allows managers to offer open feedback to employees. Basically, management and employees are free and open to discussion or negotiations. However, in India, performance appraisal are strictly based on high power distance, there are no formal appraisal systems. Indian managers rely heavily on productivity rather than performance illustrating skewed approaches to employee evaluation (Amba-Rao et al. 2000, p. 77). In most cases, feedback is not always offered, and if offered, it is not in the right manner. When it comes to pay and benefits the UK illustrates minimal differences in terms of salaries and benefits accorded to employees among different industries. Moreover, due to the low power distance and high individualism, pay and benefits are based on performance and competence. However, in India, most businesses are based on personal and emotional relationships, meaning that employees close to top executives receive considerably higher pay and benefits than subordinates (Arora, 2005, 173). Moreover, due to the collectivism nature of India, people tend to look out for each other even if it means increasing their pay and benefits for family members. 5. Conclusion and recommendations Recommendations: businesses wishing to pursue a global strategy should clearly understand the issues surrounding cross-cultural differences. UK multinational wishing to expand to India should understand how culture plays a role in determining their business practices and behaviors. As evaluated in the paper, there are numerous recommendations for UK firms seeking to expand globally to countries like India. Firstly, UK firms must identify the need to acknowledge and offer due respect to senior managers in India as well as respect them as final decision makers. Moreover, UK managers should also seek to establish strong relationships even on a personal level to effectively negotiate with their Indian counterparts. Another recommendation is the focus on enhancing HRM practices to meet those of UK standards while operating in India. This will ensure that UK multinationals can benefit from the available talent rather than using the outdated mechanisms that may prove costly for the businesses. As recommendation, UK multinationals should recruit and select potential employees based on their experience, skills, and competence rather than relying on personal or close relationships. Clearly, as businesses adopt global expansion strategies, they should be aware of cross-cultural differences to enable increased sustainability. References Amba-Rao, SC, Petrick, JA, Gupta, JD, & Embse, TD 2000, 'Comparative performance appraisal practices and management values among foreign and domestic firms in India', International Journal of Human Resource Management, vol. 11, no. 1, pp. 60-89. Arora, D 2005, 'Foreign multinationals in India : adapting to India's work : Culture and management practices', in Internationale Geschäftstätigkeiten in Asien : Länderkulturforschung anhand ausgewählter Länder, pp. 149-179. Hofstede, G. 2001. Culture’s consequences: comparing values, behaviours, institutions and organizations across nations, 2nd ed. Thousand Oaks. McFarlin, D. & Sweeney, P. 2013. International Organizational Behavior: transcending borders and cultures: NY & London, Routledge, Taylor & Francis. Metcalf, LE, Bird, A, Shankarmahesh, M, Aycan, Z, Larimo, J, & Valdelamar, DD 2006, 'Cultural tendencies in negotiation: A comparison of Finland, India, Mexico, Turkey, and the United States', Journal of World Business, vol. 41, pp. 382-394. Schneider, SC 1988, 'National vs. Corporate Culture: Implications for Human Resource Management', Human Resource Management, vol. 27, no. 2, pp. 231-246. Appendices 1. Cultural Dimensions of India Source: The Hofstede Center, India. Available at: https://geert-hofstede.com/india.html [Accessed 19 May 2016]. 2. Cultural Dimensions of the UK Source: The Hofstede Center, UK. Available at: https://geert-hofstede.com/united-kingdom.html [Accessed 19 May 2016]. Read More