An Executive Commentary by John W. The Queen Mary is now, and was then, a floating convention center docked off the coast of Southern California. I remember that my reaction was one of astonishment: Here was someone who had analyzed the world of cultures through large-scale and careful quantitative research.
However, when well done, HR management pays dividends. A seven-year study in Britain of over foreign companies showed that good HR management, as well as other factors, accounted for more of the variance in profitability and productivity than did technology, or research and development.
Doing business globally requires that adaptations be made to reflect these factors.
It is crucial that such concerns be seen as interrelated by managers and professionals as they do business and establish operations globally. Each of those factors will be examined briefly. Legal and Political Factors The nature and stability of political systems vary from country to country.
Although presidents, prime ministers, premiers, governors, senators, and representatives may change, the legal systems are Hofstede culture influencing international hrm, and global firms can depend on continuity and consistency. However, in many other nations, the legal and political systems are turbulent.
Some governments regularly are overthrown by military coups. In some parts of the world, one-party rule has led to pervasive corruption, while in others there are so many parties that governments change constantly. Also, legal systems vary in character and stability, with business contracts sometimes becoming unenforceable because of internal political factors.
International firms may have to decide strategically when to comply with certain laws and regulations and when to ignore them because of operational or political reasons. Another issue involves ethics. Because of restrictions imposed on U. HR regulations and laws vary among countries in character and detail.
In many Western European countries, laws on labor unions and employment make it difficult to reduce the number of workers because required payments to former employees can be very high, as the HR Perspective on the next page indicates.
Equal employment legislation exists to varying degrees. In some countries, laws address issues such as employment discrimination and sexual harassment.
In others, because of religious or ethical differences, employment discrimination may be an accepted practice. All of these factors reveal that it is crucial for HR professionals to conduct a comprehensive review of the political environment and employment-related laws before beginning operations in a country.
The role and nature of labor unions should be a part of that review. Economic Factors Economic factors affect the other three factors in Figure. Different countries have different economic systems. Some even still operate with a modified version of communism, which has essentially failed.
For example, in China communism is the official ec onomic approach. But as the government attempts to move to a more mixed model, it is using unemployment and layoffs to reduce government enterprises bloated with too many workers.
Many lesser-developed nations are receptive to foreign investment in order to create jobs for their growing populations. Global firms often obtain significantly cheaper labor rates in these countries than they do in Western Europe, Japan, and the United States.
However, whether firms can realize significant profits in developing nations may be determined by currency fluctuations and restrictions on transfer of earnings. Also, political instability can lead to situations in which t he assets of foreign firms are seized.
In addition, nations with weak economies may not be able to invest in maintaining and upgrading the necessary elements of their infrastructures, such as roads, electric power, schools, and telecommunications. The absence of good infrastructures may make it more difficult to convince managers from the United States or Japan to take assignments overseas.
Economic conditions vary greatly. Cost of living is a major economic consideration for global corporations. The survey ranked cities around the world in terms of costs of such things as housing, transportation and food. Moscow moved up three spots in the latest survey and surpassed perennial cost leader Tokyo.
Nearly half of workers around the world would consider moving to another country for the right job, a pay rise and other incentives such as trips home and language training, according to a new survey released on Monday.
With the global economy still struggling, employees in Mexico, Brazil, Russia, Turkey and India were most eager to grasp new opportunities, while workers in Sweden, the United States and Belgium preferred to stay closer to home, the Ipsos international poll showed.ITAP International is a consulting firm specializing in building human capability across functional, Hofstede's consequences: The impact of his work on consulting and business practices 7 Hofstede, G.
Culture's consequences: Comparing values, behaviors, institutions. Hofstede's culture model - different factors & impact on HRM (1) 1 - culture: most important factor influencing international HRM is the country where facility is located.
Culture can affect edu-human capital, political system & economic system of a country. Human resources do have a challenging role to play in organizational culture, as it is the employees who work for the organization, who embrace and improve a particular culture within the organization.
Hofstede’s model of BIM (,, ), Chinese culture has been categorised as high in power distance, low in individualism, moderate in uncertainty avoidance and masculinity, and high in long-term orientation. In , Geert Hofstede's book, Culture's Consequences: International Differences in Work-Related Values was published.
In this book, Hofstede describes the culmination of a research project begun in the 's for the HERMES corporation, later revealed to be IBM (Hofstede and Bond, ). The Cultural Approach to the Management of the International Human Resource: An Analysis of Ho fstede’s Cultural Dimensions Hofstede, National culture, Organisational culture, Multi-national companies 1.
Introduction According to Earley () if the human resource management practices are not in line with the basic tenets shared by.