Managing Multicultural Workforce and Challenges in Multicultural Environment - Term Paper Example

Executive summery Workforce management concept has received a lot of interest globally right from the human resource practitioners to the academic researchers. It has been observed that many organizations are venturing in to the international market in order to tap the global labor and market opportunities. While the organizations are venturing new businesses and projects in countries across the globe, the workers from different cultural backgrounds are expected to be recruited, trained and absorbed. As organizations expand therefore there lies a threat on managing workers from culturally diversified background. The workers in the global working environment face diverse cultural issues such as language barriers, religion, gender preference, stereotyping and other widespread multicultural issues encountered by managers in foreign country. The literature review of the paper has explored and analysed the issues and potential problems encountered while managing a multicultural workforce. The paper will narrow down to the specific problems encountered by Australian subsidiary management in India while managing local workforce. The paper will then finally outline the possible solutions to the identified problems. The paper has been divided in to three parts, the first paper outlines and analyses the cultural problems encountered by managers while working in multicultural business environment. The second part of this paper has narrowed down to talks of an Australian subsidiary in India and specific challenges faced by managers while managing local workforce in India. Finally the paper has outlined the possible solutions to the identified challenges in the first two parts, hence giving recommendations on how the workplace in the multicultural arena can be improved. Table of Contents: Title page Executive summery     1.0 Introduction 2.0 Literature Review 2.1 Indian culture 2.2 Local workforce 2.3 Managing multicultural workforce 2.4 Challenges in multicultural environment 3.0 Conclusion and Recommendations References list 1.0 INTRODUCTION Human resource management in general refers to all the procedures involved in the employee recruitment and selection, training and development, classification and compensation, performance management and retention. (Delahaye, 2011). The act of managing a workforce therefore is somewhat intricate; this is because on top of the normal human resource factor, there are other duties that need to be accomplished. This includes turnover analysis, strategic planning, legislative forecasts, budget projections, and workload projections. (White, 1999). Managing a local workforce in a multicultural environment is one thing that we cannot avoid in this era of globalization however mush it may be a great challenge to manage it at the workplace. (Koshy, 2009). Goetz (2001) had a view that while organizations are progressively realizing vast diversity in the International market and formulating diverse strategies to make good out of it, the managers need to be trained to value cultural diversity in the local workforce in order for them to offer equal employment opportunities and provide management that is desirable and acceptable in the local culture. Therefore an Australian subsidiary in India is expected to meet a lot of challenges while managing the local workforce in India. This is due to the multicultural nature of Indian workforce and given that India has a great cultural diversity brought by religion and caste system. The challenges therefore must be properly identified, problems outlined and solutions formulated to enable the subsidiary run its business activities effectively and efficiently. 2.0 LITERATURE REVIEW 2.1 Local workforce Management Goetz (2001) observed that the term workforce management has been referred by other scholars as Human Resource Management Systems. Others refer to it as the larger Enterprise Resource Planning systems which include payroll management, human resource, benefits, forecasting and scheduling, attendance, training and performance management. It is actually the deliberate configuration adopted to reload the business processes of an organization with the correct grade and occupation of staff. Local Workforce management covers all the activities involved in sustaining an industrious and satisfied labor force which is every company’s most precious asset. It involves organization of responsibility outline that ensures each division's strategic precedence and objectives are governed in a professional and cost effective manner. White (1999). Recent research (Ongori and Ogolla, 2007) shows that Workforce management process should actually be adaptable, impulsive, and conform to the organizational plans that are influenced by financial conditions. It is very challenging for international companies to introduce universal corporate culture across the entire organization. Others have turned to imperialistic approach where corporate culture is imposed on commencement. Others use federalist approach where each subsidiary base its corporate culture in the local believes and norms. Others have even tried to blend the two models to come up with the best preference where neither procedures nor quality is compromised. (Copeland, 2006). 2.2 Indian culture Culture is defines as the sum total of the beliefs, rules, techniques, institutions, and artefacts that characterize human population. (Copeland, 2006). Jackson and Schuler (2003) also defined culture as the unique pattern of shared assumptions, values, and norms that shape the socialization, symbols, language, narratives and practices of a group of people. Chakrabarty (2006) illustrated that the Indian population is composed of the Hindus who are estimated to be 80% of the Indian population while Muslims forms 13.4% of the population. Christians takes 2.3% while Buddhists, Sikhs, Jains and others takes the rest. There were various riots sometime back for instance the Bombay riots of 1990s, Gujarat riots of 2002 and anti-Sikh riots of 1984. These came about during the leadership of Thackeray clan in the India’s economic nerve centre at Mumbai where North Indian migrants, South Indian population and Gujaratis were violently attacked at various points. (Bhargava, 2002). According to (Bhargava, 2002) the riots and violence created hatred among the various communities in India. Looking at the multicultural phenomena in India coupled with the caste system, it is actually challenging to manage the local workforce with such diversity in India. Similarly, it is in India that caste profiling was conducted by the Tata Group. The group did a survey to conduct a caste profiling of the local workforce. The Caste profiling survey results enabled the Tatas discover the caste imbalance amongst its workforce. This lead to the group taking a corrective action by employing and training the Dalits in the company. (Bhargava, 2002) The caste system is significantly limiting the homogeneous workplace practice because the occupations are structured based on caste. Therefore most of the physical work, sewage removal and sanitation work is done by those in the lower pyramid while descent jobs are left to the higher in the pyramid mostly from Hinduism, the upper socioeconomic stratum.(Chakrabarty, 2006). This scenario depicts that there is a difference on the way business is done from one culture to the other. It is therefore good for people conducting business in another country to know the basic cultural work ethics in order to adhere to it. Multiculturalism in India is not something new; the concept is analogous to the very fabric of Indian civilization. India as a country that has diverse cultures, religions, languages and communities. (Koshy, 2009). The figure below illustrates the Indian multiculturism and labor diversity. (Koshy, 2009). Fig 1. Indian multiculturalism 2.3 Managing multicultural workforce The Oxford Dictionary defines the word multicultural as “including of people of several different races, religions, languages and traditions”. (Oxford Dictionary, 2005). Koshy (2009) have also shown that multicultural workforce refers to the employees of a company from different ethnic, religious, racial and gender backgrounds. Managing multicultural workforce basically focuses on changing the organizational culture and mindsets of the multicultural workforce. In defining culture, one is able to depict that any organization from another country needs to develop different values, patterns of behaviour, believes and patterns of behaviour to conform to the host countries’ culture. This includes attitude towards work, labour relations, workplace practice and division of responsibilities and hierarchy of making decisions. This work has been supported in works of Copeland (2006). According to Shenkar (2001) Managing workforce from a diverse culture in a range of business context can be challenging, therefore managers from a parent country needs to understand the local workforce who may require a different organization structure. According to Bhargava (2002), workforce needs to be well managed to avoid Culture clash. He referred culture clash to a case where two different cultural groups interact in a work place and the differences in their beliefs, values, and styles of communication or rules of behaviour builds some misunderstandings or antagonism. In this case therefore, the procedure and structures established should be encompassing both the Australian and Indian Culture in order for desired synergies to be realized. The Australians needs to culturally adapt to Indians way of life on religion, believes, way of work and product designs. Although the local workforce in India can be faced by cultural diversity and firm religious beliefs, if well managed, Indian workforce can be the greatest asset with colossal potential that will transform the way business is done in the global economy. Cultural differences between two countries and also at the organisational level are likely to be relevant (Jackson and Schuler 2003). Looking at the cultural diversity particularly on expatriates, national cultures and the workforce, Jackson and Schuler (2003) highlighted the cultural dimensions with reference to Hofstede, (1980). This examined the way cultural diversity is spread in cross-border groupings rather than only spotlighting on the precise values, beliefs and other fundamentals of culture. 2.4 Challenges in multicultural environment 2.4.1 Cultural differences Cultural difference greatly affects the principles that workers bring to the place of work. Different workers from one culture feel differently regarding their responsibilities in a company, how they work and how they need to be recognized. A worker may be motivated by one thing and the same thing inhibits another worker. (Copeland, 2006). For instance when congratulating an employee, a pat at the back may encourage one worker but same could intimidate another worker. When working with the local workforce in India, the Australian managers needs to understand well the Indian culture. This will greatly enable smooth running of day to day activities of the subsidiary. Looking at the Australian culture, this may not be very difficult because the population of Australia have migrants coming from over 200 countries. In fact more than 43% of Australians were either born in other countries or one of their parents was a migrant. The migrants have therefore brought language skills together with more capabilities valuable in the current economy and global workforce. (Jackson and Schule, 2003) 2.4.2 Universalism and particularism Koshy (2009) described that the universalistic cultures rules and regulations are applied in all situations, regardless of particular conditions. This is common in Australian companies while India adopts the particularist system where each case is handled depending on the underlying situation. Managers therefore need to understand the Indian people to avoid applying universalistic system of making decision. For instance, if an employee is late from work, in Australia the action taken against such an employee is normally universal irrespective of the cause of the lateness. However in the Indian case, the manager must look at the cause of lateness and base the action to take on the underlying situation. 2.4.3 Unwritten rules and non-verbal communication Every organization has a culture that reflects the way work is to be done, attitude on those things that are important, behavior of employees and the way to reward them. The general interpretation of non-verbal communication may differ from on culture to the other. The workers from diverse origin may be different in non-verbal behavior especially on dressing and appearance. (Copeland, 2006). For instance when a Hindu wears a turban, workers from Australian culture may feel uncomfortable given that they may not know the importance it has in the Hindu culture. Similarly the Australian workers cannot comprehend why the Indian ladies cover their whole body irrespective of the high summer temperatures when the Australian ladies are in their bikinis at the beach. 2.4.4 Basis for decision making In the basis of decision making the Australian system of management adopts the mechanistic, rationale, scientific, and objective whereas Indians embraces the rule of thumb, subjective and tacit model. (Jackson and Schule, 2003). Therefore managing the local workforce would be very hard for Australian managers especially on assessment and promotions if scientific, and objective models are not going to be used in India. 2.4.5 Individualism and collectivism Individualism refers to whether individual rights and values are dominant or subordinate to those of the collective society. Australian companies are more individualistic while Indians are collectivists. (Koshy, 2009). This difference makes it very challenging for the managers from Australia to handle the local workforce in India. 2.4.6 Neutral and emotional This refers to the mode of decision making in an organization. Australians embrace neural mode where managers use reports, data and analysis to make decisions while Indians prefers emotional option where decision making is based on intuition, opinions, and gut feeling valid criteria and credible. (Koshy, 2009). In this case therefore, managers should be able to learn to peg their decision concerning the local workforce on intuition, opinions, and gut feeling 2.4.7 Achievement oriented and Ascription oriented Managers from different countries have different way of managing the workforce. There are those that view status to be earned but not a right hence cases of recruitment and promotion opportunities highly depends on performance, this is a case in Australia. Others however view status is more often than not a right hence cases of recruitment and promotion opportunities highly depends on ethnicity, religion, seniority, gender, or even birth. This is seen in India. (Koshy, 2009). Considering this phenomena, the managers from Australia have a challenge to learn to handle workforce diligently while balancing organisation performance with Indian multicultural workforce. 2.4.8 Stereotyping Stereotypes depict different groups of workers in a given way at the workplace hence these stereotypes will contribute to worker’s intolerance to other cultures. Stereotypes impair those affected when illogical conclusions are derived about them, and the conclusions continue to be untested and unchanged. (Goetz, 2001) Workers from Australia in India may be exposed to stereotype at the work place. 2.4.9 Communication mechanisms The Australian managers will face a lot of challenges managing the local workforce especially on communication mechanisms. This is because Australians embrace the role of formal rules and regulations whereas Indians prefer the personal networks and informal communication. Given that elements like internal communication and team building can be managed well if there is a good communication mechanism. Similarly any organization whose workers have a good communication channel is able retain an industriously and competent workforce, conflicts and tensions can be more easily resolved. The managers therefore must have to ensure there is a balance in the way the organization communicates to the employees. 2.4.10 Gender differentiations Gender differentiation patterns in international business environment and employment in general are unrelenting features of the workforce markets which transcend global boundaries. Some countries have high gender differentiation presented by the rretirement age of women workers being five years earlier than their male counterparts. (Anker 1997) According to Watts, (2003), the degree of Gender differentiation and roles is relatively high in India compared to Australia. Since Australia in the recent years have tried to improve on the reducing the level of gender differentiation (Watts 2003), it may not be the case in India where it is believed that gender differentiation is relatively higher. The managers therefore need to look in to the Indian policy on gender and implement local workforce strategies to suit organizational policies and procedures. 3.0 CONCLUSIONS AND RECOMMENDATION 3.1. Recommendation Recognize diversity International managers need to identify the Indian culture and ethnic groups within the subsidiary in order to appreciate the essentials of uniformity and standardization to be promoted. The diversity issues should be fabricated into the recruitment, human resource planning strategy and location decisions to avoid cultural clash. (Goetz, 2001) Polycentric approach This is where each subsidiary in a multinational company adopts the host countries’ culture and believes hence the local managers’ cultural believes and decision making is favored over those of managers from the home-country. (Shenkar, 2001) Cultural sensitivity and Cross-cultural effectiveness There is need for international managers to change their behavior to suit local values and practices in the host country. Goetz (2001). There should be the ability to strike a balance between one own values and norms and that of the foreign country; in this case India. Avoid ethnocentric behaviour Ethnocentric refers to the belief that ones ethnic group is more superior to the other especially on decision making, resource allocation and overall organizational performance in a multinational organization. (Sirmon et al, 2004). The management should treat all the employees in the subsidiary equally to avoid ethnocentric behaviour that has been observed in many international and multicultural organisations. Appropriate decision making For effective management of multicultural workforce, the managers need to address modes of decision making, problem solving and the sensitive factor of cultural diversity by considering what the Indians believe in to avoid cultural clash. This can be done by organizing a face to face meeting between the Australian subsidiary top management and the Indian locals. (Shenkar, 2001) Discourage stereotyping Therefore stereotyping is unjust and a discriminatory obsession that the wider social order needs to discover and refrain from. In the Australian management understand and monitor stereotyping then the local workforce can fetch the human capital that is most vital constituent of business which many organizations have not fully taken charge. 3.2 Conclusion Competition in the current global economy has challenged organizations to adoption of multicultural diversity and well managing of the local workforce in order to portray positive image as organizations upholding multiculturalism. Workforce management leads organizations to prosperity; for any organization to prosper there must be an excellent human capital in place hence workforce management is essential in ensuring that the organization put in place adequate and competent human capital to realize its broad objectives and goals. Accordingly human capital is certainly the most significant constituent of business. The organisations that have neglected the strength of workforce management strategic approach are exposed to substantial and costly business risks. 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