02 Nov 2017
There are three main international human resource management approaches: comparative, cross-cultural and multi-national. In the comparative approach, the focus is on institutional differences, such as, trade unions, government and politics, and the PESTEL approach is mainly used to carry out the process of comparative analysis between and among different factors that influence the human resource practices. On the other hand, the cross-cultural approach to human resource is based on the concept of uniqueness, in which each region and nation has its own local cultural values, beliefs and practices. Consequently, standardised human resource policies may not be effective in foreign regions and nations. Sociological and psychological approaches are mainly adopted in the cross-cultural approach to human resource management. In contrast, international coherence is the primary objective in the multi-national approach to human resource. Strategic human resource management is therefore used as a way of framing business activities. The PESTEL approach has been included in the following sections, and is followed by a comparison and contrast between and among the Latin American countries.
The PESTEL approach refers to the political, economic, social, technological, environmental and legal aspects of any business environment. These factors directly or indirectly influence international human resource management activities. Among other factors, the political, economic, technological and legal aspects have more influence than any other factor on the functioning of international human resource management.
The significance of the Latin American economy is growing among all developing nations (Elvira and Davila, 2005). Over the last two decades, Latin American countries have begun an economic opening and democratic transition of their entire society by attracting foreign direct investment (FDI) into the region (ibid). This being the case, international human resource management practices in Chile, Mexico and Brazil have evolved considerably over this period.
Brazil faces a number of social and technological problems. For instance, according to the Economist, Brazil’s educational system is largely in a state of disarray, and faces the problem with teacher truancy (Chartered Institute of Personnel and Development, 2010). In addition, Brazil’s higher education system is below the global standard of education, and this dismal situation consequently creates problems for employers because they need to bear additional training and development session costs for current and potential employees (ibid). This educational gap creates obstacles to the smooth functioning of modern management practices, such as ‘just-in-time’ production systems and self-managed teams (Elvira and Davila, 2005).
Rewards and recognition have different values and implications for Latin American human resource management practices. For instance, Mexican employees mainly base their work-related expectations and decisions on the needs of their families (Diaz-Saenz and Witherspoon, 2000). This indicates that the majority of Mexicans attach considerable significance to their families’ basic needs and requirements.
Additionally, labour legislation provides institutional support to cultural and societal values. In Mexico, for instance, labour laws have been developed to promote and strengthen the social welfare of the masses (Elvira and Davila, 2005). The objective of labour legislation is therefore to maintain and preserve workers’ families’ quality of life and their basic necessities.
The above description clearly distinguishes between the labour practices in Brazil and Mexico. In Brazil, culture works as a barrier to workplace activities and serves as a disincentive, not only for employers but also for employees. In contrast, the Mexican labour laws support the local cultural values and their application to workplace activities, and this consequently has a positive and constructive effect on the performance of employees.
In Mexico, reward systems may become a contentious issue when they are based on performance appraisals (Elvira and Davila, 2005). In this regard, Osland et al. (1999) highlighted that the effect of performance appraisals is coloured by a work culture that does not allow subordinates to enter into conflicting situations with their superiors. Therefore, performance appraisals remain contentious by this definition, and their subsequent results are seldom practically applied (Elvira and Davila, 2005).
In Latin America, staffing policies are primarily based on personality qualities and skills (De Forest, 1994), or are mainly based on social interaction or social bonds (Abarca et al., 1998). For instance, in Chile, it is crucial for top executives to develop and maintain personal links with primary social groups, such as relationships with the elite class or wealthy families, country club members, university colleagues or birthplace geographical attachments for the purpose of social and organisational advancement (ibid). Similarly, the Mexican manufacturing companies prefer to hire candidates who are willing to cooperate and coordinate with the top management of the companies. For the purpose of developing and maintaining a stable and durable labour climate, this type of practice is common in Mexico (De Forest, 1994). In contrast, Brazil’s corporate organisations face legal, cultural and regulatory barriers which act as hurdles to good performance; at the same time, hiring and firing remains a complex process, as the labour laws are primarily based on the 1940s model and were established in order to mainly address the issues pertaining to large-scale manufacturing (Chartered Institute of Personnel and Development, 2010).
Labour relations in many Latin American countries are mainly constructed through various historical processes (Elvira and Davila, 2005). In this regard, unionism remains a political and social reality, with considerable implications for all Latin American countries (ibid). This situation reflects the fact that unionism receives support from both social and political aspects of the society. Therefore, it is this support and the contribution of both social and political dimensions that has strengthened the foundations of unionism. In addition, this phenomenon also indicates that personal contact, friendship, social communication and interaction are values that guide the different management styles prevalent in Latin American corporations. For instance, Gabrielidis et al. (1997) explained that Mexicans prefer to apply conflict management styles that also include concern for others. On the other hand, Dominicans apply an autocratic or mediating style (Cropanzano et al., 1999).
Latin American countries are experiencing substantial growth in foreign direct investment. However, the PESTEL approach and comparisons between and among the Latin American countries highlight the fact that each country must address different types of social and human resource challenges. Brazil faces education-related problems and an increasing cost of human resource to multinational companies. On the other hand, Mexican employees give priority to their family needs and requirements. At the same time, labour legislation directly strengthens societal and cultural values in Mexico; however, here, reward systems may become a contentious issue when the reward systems are primarily based on performance appraisals. In Latin America, employees are hired on the basis of personality traits and qualities, and on the basis of social bonds. For instance, for Chilean top executives, it is essential to develop and maintain social and personal relationships with primary social groups, such as the elite class or wealthy families. Simultaneously, the Mexican manufacturing firms prefer to hire those candidates who are willing to work and coordinate with top management.
Abarca, N., Majluf, N., and Rodriguez, D. (1998) Identifying management in Chile: A behavioral approach, International Studies of Management & Organizations, 28(2): 18-37.
Chartered Institute of Personnel and Development, (2010) Talent Development in the BRIC Countries. [online] Available at: <http://www.cipd.co.uk/NR/rdonlyres/EB69B9A5-BAC0-4D67-94EA-C65B5601A0AA/0/Talent_development_BRIC_countries.pdf>. [Accessed: 25 March 2013].
Cropanzano, R., Aguinis, H., Schminke, M. and Denham, D.L. (1999) Disputant reactions to managerial conflict resolution tactics: A comparison among Argentina, the Dominican Republic, Mexico, and the United States, Group & Organization Management, 24(2): 124-54.
De Forest, M.E. (1994) Thinking of a plant in MexKoT, Academy of Management Executive, 8(1): 33-40.
Diaz-Saenz, H.R. and Witherspoon, P.D. (2000) ‘Psychological Contracts in Mexico’, in Rousseau, D.M. and Schalk, R. (eds) Psychological Contracts in Employment: Cross-National Perspectives. Thousand Oaks, CA: Sage: 158-75.
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Elvira, M.M. and Davila, A. (2005) Special research issue on human resource management in Latin America, International Journal of Human Resource Management, 16: 2164-74.
Gabrielidis, C., Stephan, W.G., Yharra, O., Pearson, V.M.D.S. and Villarreal, L. (1997) Preferred styles of conflict resolution, Journal of Cross-Cultural Psychology, 28(6): 661-77.
Osland, J.S., De Franco, S. and Osland, A. (1999) Organizational implications of Latin American culture: Lessons for the expatriate manager, Journal of Management Inquiry, 8(2): 219-34.
International assignments have become an integral component of international human resource management practices. Transferring business and technological know-how, enhancing communication between subsidiaries and headquarters and implementing a unified organisation policy are the prime components of international assignments. Leaving home and adjusting to completely different cultures and workplace environments creates challenges, not only for international assignees but also for multinational companies. The relocation also affects the professional performance of the expatriates. In order to maintain and improve expatriates’ performance, multinational companies are required to develop and implement inter-cultural training sessions in which the prime focus is on the training contents and intervention strategies. In the following sections, the significance of international assignments has been highlighted. This is followed by a discussion of international human resource management strategies for recruitment and selection, and a segment on international human resource training strategies has also been included. Critical assessments are then mentioned before the conclusion.
The business world is experiencing rapid change as globalisation becomes a key strategic requirement for multinational organisations (Kutscher and Schmid, 2002). Brown (2008) stated that in order to compete effectively in globalised business, international assignments have become an integral component of multinational organisations. The strategic significance of international assignments has been defined in terms of transferring business and technological know-how, providing and enhancing interaction and communication between headquarters and subsidiaries, technically and professionally developing the workforce and implementing a unified organisation policy (Goerzen and Beamish, 2007).
As expatriation plays a key strategic role in the management of global talent, a large amount of literature focuses on the different aspects involved in staffing international assignments (Altman and Baruch, 2012). Expatriation requires relocation, either with or without the employees’ families (Richardson, 2006). Leaving one’s home country and adjusting to a different culture and a new workplace environment requires a considerable amount of ambiguity tolerance, flexibility and adaptability; factors which result in stressful challenges in the lives of expatriates (Altman and Baruch, 2012). These factors also directly affect the professional performance of expatriates, who find it difficult to satisfy job description requirements and the conditions of the new job location. However, Harzing (1995) contended that the rate of expatriate failure has been disputed in the international human resource management literature. Within the same context, the high level of expatriate failure is considered to be expensive (Stroh et al., 2005). It is also commonly perceived that expatriation is neither easy to manage nor simple to construe (Scullion and Collings, 2006).
The intercultural training of international staff facilitates the achievement of a higher level of inter-cultural competence (Tarique and Caligiuri, 2004). Previous research on this issue has highlighted the fact that intercultural training possesses the potential to considerably improve the performance of international staff (Waxin and Panaccio, 2005). Relating to a typology of inter-cultural training frameworks, there are some key criteria of merit:
The training contents (i.e. culture-general/culture-specific (Graf and Mertesacker, 2009)).
Numerous intervention strategies due to the multi-dimensional aspect of inter-cultural competence (affective, cognitive and behavioural (Graf, 2003)). Therefore, the designs for intercultural training focus either on awareness and knowledge, emotional confrontation and feelings, or skills that enhance the possibility of result-oriented interaction and communication (Brislin and Yoshida, 1994).
The training approaches adopted in the training (experiential/didactic) (Gudykunst and Hammer, 1998).
These strategies may not be effective in international human resource management practices. For instance, training contents were mentioned by Graf and Mertesacker (2009) without further elaboration on the type and nature of training contents that are useful and effective for the training of international assignees. Similarly, the points made by Gudykunst and Hammer (1998) and Brislin and Yoshida (1994) failed to provide any substantive procedure sufficient to generate the required level of professional performance from the expatriates. Against this background, it has been argued that training remains more effective and successful if it is tailor-made (Earley and Person, 2004). Human resource management consequently needs to ascertain the employees’ profile of inter-cultural skills and their strengths and weaknesses before determining and carrying out the training sessions (Littrell and Salas, 2005). In addition, systematic assessments, including of training programme design, may reduce costs, time and personnel because they remain appropriate to ascertain the type and scope of the training needed (Selmer, 2000). For example, if international assignees’ cognitive deficiencies regarding intercultural competence are found, it would be more effective to design and provide cognitive training modules emphasising awareness and knowledge (Graf and Mertesacker, 2009).
In order to systematically assess and establish training requirements, multi-national organisations employ psychometrically sound instruments, such as questionnaires. The biggest merit of standardised questionnaires is that they provide a comprehensive assessment, because they reduce measurement errors (Graf and Mertesacker, 2009). In addition, applying the self-assessment tools before conducting training and development sessions increases candidates’ acceptance of the related training interventions (Brown and Knight, 1999). McCaffery (1995) stated that managers are often unwilling to consider role-play as an influential instrument for inter-cultural training. In contrast, it has been argued that there is a clear lack of effective and reliable questionnaires evaluating different competency dimensions of international assignees (Johnson et al., 2006).
To date, there has been no systemic overview pertaining to self-assessment questionnaires which describe and elaborate on intercultural training needs (Littrell and Salas, 2005). In fact, the research on inter-cultural training has historically been widely undermined (Bhawuk and Brislin, 2000). In particular, the application of psychometric quantitative techniques has seldom been substantially debated with regard to intercultural training (McCelland, 1994). Consequently, on the issue of intercultural training, only a limited number of studies refer to needs-assessment strategies employing valid measures (Selmer, 2000), whereas in the general training literature, this aspect has been constantly and regularly discussed (Swierczek and Carmichael, 1985).
International assignments have become an integral part of multinational companies. In order to compete globally, multinational companies are required to appropriately manage the different aspects and issues associated with the activity of international assignments. Different cultures and new workplace environments remain the main issues for both international assignees and multinational companies. Both factors have a negative effect on the professional performance of international assignees, and they find it difficult to satisfy their job description requirements. In order to reduce the negative effects of different cultures and new workplace environments, multinational companies conduct various inter-cultural training sessions in which the focus is placed on the training contents and intervention strategies. However, there is no perfect set of inter-cultural training sessions which remedy all international human resource problems. As a result, different types of inter-cultural training sessions are required to be carried out. Within this context, questionnaires remain the most effective tool in the development of tailor-made training programmes.
Altman, Y. and Baruch, Y. (2012) Global self-initiated corporate expatriate careers: A new era in international assignments? Personnel Review, 41(2): 233-255.
Bhawuk, D.P.S. and Brislin, R.W. (2000) Cross-cultural training: A review, Applied Psychology: An International Review, 49: 162-91.
Brislin, R.W. and Yoshida, T. (1994) Intercultural Communication Training: An Introduction, California: Sage.
Brown, R.J. (2008) Dominant stressors on expatriate couples during international assignments, International Journal of Human Resource Management, 19(6): 1018-34.
Brown, C. and Knight, K. (1999) ‘Introduction to Self-Awareness Inventories’, in Fowler, S. and Mumford, M. (eds), Intercultural Sourcebook: Cross-Cultural Training Methods, Intercultural Press: Yarmouth, pp. 19–30
Earley, P.C. and Peterson, R.S. (2004) The elusive cultural chameleon: Cultural intelligence as a new approach to intercultural training for the global manager, Academy of Management Learning and Education, 3(1): 100-15.
Goerzen, A. and Beamish, P.W. (2007) The Penrose effect: ‘Excess’ expatriates in multinational enterprises, Management International Review, 47(2): 221-39.
Graf, A. (2003) Assessing intercultural training designs, Journal of European Industrial Training, 28(2/3/4): 199-214.
Graf, A. & Mertesacker, M. (2009) Intercultural training: Six measures assessing training needs, Journal of European Industrial Training, 33(6): 539-590.
Gudykunst, W.B. and Hammer, M.R. (1998) ‘Basic Training Design: Approaches to Intercultural Training’, in Landis, D. and Brislin, R.W. (eds), Handbook of Intercultural Training. Volume I: Issues in Theory and Design, New York: Elmsfeld: 118-54.
Harzing, A.W.K. (1995) The persistent myth of high expatriate failure rates, International Journal of Human Resource Management, 6: 457-74.
Johnson, J.P., Lenartowicz, T. and Apud, S. (2006) Cross-cultural competence in international
business: Toward a definition and a model, Journal of International Business Studies, 37: 525-543.
Kutscher, M and Schmid, S. (2002) Internationales Management, Oldenburg: Wien.
Littrell, L.N. and Salas, E. (2005) A review of cross-cultural training: Best practices, guidelines, and research needs, Human Resource Development Review, 4(3): 305-34.
McCaffery, J.A. (1995) ‘The Role Play: A Powerful but Difficult Training Tool’, in Fowler, S. and Mumford, M. (eds), Intercultural Sourcebook: Cross-Cultural Training Methods, Yarmouth: Intercultural Press, pp. 17–26
McClelland, S.B. (1994) Training needs assessment data-gathering methods, Part 1. Survey questionnaires, Journal of European Industrial Training, 18(1): 22-26.
Richardson, J. (2006) Self-directed expatriation: Family matters, Personnel Review, 35: 469-486.
Scullion, H. and Collings, D.G. (eds) (2006) Global Staffing, London: Routledge.
Selmer, J. (2000) A quantitative needs assessment technique for cross-cultural work adjustment training, Human Resource Development Quarterly, 11(3): 269-281.
Stroh, L.K., Black, J.S., Mendenhall, M.E. and Gregersen, H.B. (2005) International Assignments: An Integration of Strategy, Research, and Practice, New Jersey: Lawrence Erlbaum Associates.
Swierczek, F and Carmichael, L (1985) Assessing training needs: a skills approach, Public Personnel Management, 14, pp. 59-74.
Tarique, L. and Caligiuri, P. (2004), ‘Training and development of international staff’, in Harzing, A. and Jay, V.R. (eds), International Human Resource Management, Sage: Thousand Oaks, CA: 283-306.
Waxin, M.F. and Panaccio, A. (2005) Cross-cultural training to facilitate expatriate adjustment: It works! Personnel Review, 34(1): 51-67.
Cross-cultural issues create severe problems for multinational companies operating in emerging countries. They face the implementation issue of cross-border knowledge transfer, and hiring qualified and experienced candidates remains one of the most serious human resource management issues. At the same time, it is no secret that emerging countries lack the required experienced and a qualified, skilled labour force. Additionally, culture cannot have the same universal meaning, definition and scope. In the following sections of this paper, cross-cultural issues are highlighted and discussed, followed by a comparison between British and Indian human resource managers regarding cross-cultural issues. This highlights the fact that multinational companies operating in both countries do not face similar cross-cultural issues, but rather encounter different human resource management issues. Before the conclusion, cross-cultural issues from the cognitive perspective are critically discussed and evaluated.
The ramifications of the increasing growth of emerging countries for international human resource management are considerable and significant in numerous ways for multinational organisations (Schullion et al., 2007). Morley and Collings (2004) argued that emerging economies also present a challenge for western multi-national corporations. For instance, it has been contended that the implementation of cross-border knowledge transfer between and among multinational companies that are physically established in different cultural contexts remains more challenging and difficult than between those in culturally similar countries (Li and Scullion, 2006). Currently, multinational companies which operate in emerging countries face difficulties in selecting, recruiting and permanently retaining a competitive managerial workforce to function appropriately in such environments (Björkman and Xiucheng, 2002). Similarly, this situation becomes more challenging and difficult due to the fact that emerging countries face an acute shortage of a suitably experienced, qualified and skilled workforce for both local and multinational companies (Gupta and Wang, 2007).
Culture is a debatable concept due to its scope, meaning and definition (Tayeb, 1994). When describing or evaluating vital concepts of human resource management from a cross-cultural perspective, it becomes difficult to deconstruct the numerous effects of culture on managerial actions, such as legislative aspects, determinants of business and trade systems and the competence of human resource management actors (Sparrow and Hiltrop, 1997). Against this background, most research has sidelined such complex factors and their influence on the aggregate performance of international human resource management; the various human resource management academicians have divided these factors into the convergence and divergence aspects of management (Budhwar and Sparrow, 2002). Within this context, supporters of the ‘convergence’ aspects have stated that managers’ personalities and behaviour adopt similar aspects throughout the business world under the impact of culture-free and contingent forces, such as structure, technology and work process (ibid). However, the contrasting dimension is that there exists no universally defined and applied management theory because of the impact of regional and national cultures, and along with the presence of other variables relevant and specific to countries (ibid).
The need for more comprehensive cross-national human resource management studies, particularly between developing and developed nations, remains strong (Budhwar and Debrah, 2001). In order to evaluate the performance of human resource management personnel working in India and Britain, their challenges and tasks have been further evaluated and compared.
Personnel specialists both in Britain and India remain under considerable pressure to appropriately manage their human resources within a competitive and dynamic environment (Budhwar and Sparrow, 2002). Sisson and Storey (2000) contended that British personnel experience pressure to increase and solidify their human resource policies for the purpose of countering (sex, age and ethnic) discrimination in the workplace, enhancing and upgrading competition levels, training and developing a diverse set of personal and professional competencies in their human resources, and heading in the direction of the continent-based harmonisation of workplace conditions throughout Europe. In India, the recent liberalised economic policies have increased the level of competition, and this increased competition has put a substantial amount of pressure on personnel specialists to enable their employees to effectively compete with overseas organisations in terms of efficiency and effectiveness and personal and professional skills (Venkata Ratnam, 1995). Benson (1995) highlighted that human resource management practices and policies remain under pressure to change and evolve under such types of competitive pressures.
Some academic researchers have attempted to research and study human resource management issues from a cognitive perspective (Budhwar and Sparrow, 2002). For instance, the relative influence of functional area, individual personality characteristics and nationality on managerial beliefs has been investigated within a Hungarian-American joint venture (Markoczy, 1995). Sadler-Smith (1998) carried out an assessment and examination of the ramification of managers’ cognitive abilities and cognitive styles for the management of their human resources. In addition, variations in the cognitive behaviours and styles of managers from six different nations have also been investigated (Allison and Hayes, 2000). In order to develop and maintain a constructive and productive working relationship between managers from different countries, training should be developed and designed to accommodate or modify cognitive styles, and only those employees and management teams whose cognitive working and styles are similar to those of their foreign colleagues should be chosen (Budhwar and Sparrow, 2002). Ensley and Pearce (2001) contended that the shared cognition of top management teams remains the ultimate result of group processes, and their subsequent outcome highlights the fact that such collective strategic cognition is significant for forecasting aggregate organisational functionality and performance. Within the same context, Abramson et al. (1996) attempted to construct a workable framework for the purpose of developing and establishing interaction and connections between cross-cultural differences in schemata, performance or organisational outcomes and managers’ preferences. Despite conducting a considerable amount of research on this topic, there is still a dearth of cognition research in the human resource management area (Budhwar and Sparrow, 2002).
Cross-border knowledge transfer, the acute shortage of qualified and experienced candidates and hiring issues remain the primary cross-cultural issues that are mainly faced by multinational companies in emerging countries. In addition, multinational companies face different cross-cultural issues in Britain and in India. For instance, personnel specialists face issues of sex, ethnic and age discrimination in the United Kingdom. By reducing the presence and effect of such human resource issues, the British-based multinational companies will be able to develop and maintain a required level of competition. On the other hand, personnel specialists do not face similar issues, but they are required to enhance the personal and professional competence and skills of their workforce. The cognitive perspective highlights different aspects of cross-cultural issues, and some authors have maintained that human resource training should be developed and designed in a way that accommodates or modifies cognitive styles for the purpose of developing and maintaining a productive working relationship between local and expatriate employees.
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