Cultural Impact on Human Resource Management
Culture can be defined as a way of living of people which is affected by their values, beliefs, attitude, art and science, modes of perception, thoughts and activities. In this way, culture explains how an individual live and behave in an environment and how his/her thoughts and perception are molded which affect the mutual relationship between individual and environment in which he/she lives. Things were easily manageable with less diversified workforce, but globalization has changed the scenario altogether, and this phenomenon has accentuated the cultural differences within the organization affecting the performance of it. Human resource practices like training, staffing have a significant impact due to cultural differences.
Now days, human resource is considered the most significant and difference making aspect of organizations and number of activities are undertaken, and lots of programs are implemented to increase the productivity of employees by supporting and accommodating employees ever changing needs. In this regard, the importance of organizational culture has increased manifold. Number of studies has been taken to assess the impact of culture on human resource management. Corporate culture and national culture both have impact on organization and so on the employee’s performance. Multinational companies are busy promoting corporate culture improving control, integrating and coordinating their subsidiaries spread over the entire globe. Yet these subsidiaries operate in different national culture, creating problems in implementing and accepting unified human resource practices and policies like compensation system, selection and socialization and planning appraisal. In past three decades, corporate culture has earned much attention, and many books such as In Search Of Excellence (Peter & Waterman, 1982) and Corporate Culture (Deal & Kennedy, 1982) have hit the market, and many eager and energetic executives benefitted from such literature. While there are strong evidences to suggest the direct link between companies performance and corporate culture, but such link is still debatable and may be challenged. Every environment demands different strategies, and the true test of organizational culture is to streamline with these strategies. MNC is, therefore, mindful to pay attention to the fitness of corporate culture within their subsidiaries operating in different national cultures to smooth implementation, especially HRM strategy.
This paper is aimed to assess the possible conflict of organizational culture and the national culture of a local subsidiary mostly focusing on HR practices. In the first place, the relevant definition of culture will be discussed which will be business oriented and afterwards it will be proceeded by the underlying assumptions regarding human resource practices. Then we will discuss what solutions are available there to avoid differences of culture among employees working under the same roof.
Culture matters because it is a powerful, latent, and often unconscious set of forces that determine both our individual and collective behavior, perception, thought patterns and values. (Ruth Alas et al, 2008, pp. 50) It is difficult to give a standard and universal definition of culture because there are multiple definitions, and this ambiguity is further increased by the number of disciplines involved in this topic. This wide and broad explanation does not necessarily help to increase clarity. Therefore to keep thing clear the model developed by Schein (1985) is discussed to define culture. According to this model, culture is represented at three levels: 1) behavior and artifacts; 2) beliefs and values; 3) underlying assumptions. These levels are placed in such a way that shows their visibility like behavior and artifact are easy to observe while underlying assumption are difficult to interpret. This model can help to understand both corporate and national culture. However, Laurent (1986) argues that corporate culture can change the first two levels, but it has little impact on underlying assumptions, which is mostly reflected in national culture. This raises the issue that whether company’s values, behavior and beliefs are merely complied with or truly incorporated. This is specifically relevant for human resource professional regarding motivation, dedication, commitment and the promotion of employees. The underlying assumptions define ways of perceiving, thinking and evaluating the self, world and others. The relationship of individual with nature and other human being is all part of underlying assumptions. For example, Western culture views man above nature and its uncertainty is manageable. In Eastern culture, man is considered in harmony with nature or subservient to it and natural uncertainty cannot be managed. This difference is also seen in the nature of human relationship. In Eastern culture, people give importance to the relationship over the task and on groups but in Western culture task is given more importance than relationship.
Organization uses its culture to have control over its subsidiaries. It serves to control the behavior of employees, inculcating them values and norms that tend to produce the desired results. In fact, corporate culture is managed by means of HRM practices. So in this way "like minded" individuals are become part of organization through socialization by providing them training and personal interaction. This training aims to develop strong organizational commitment by means of different human resource policies like stock option plans, job security, recreational and house accommodation facilities etc and many excellent companies like IBM, HP frequently use these methods. However some of these practices may fail to provide the appropriate space for values and norms and beliefs of the local environment where the subsidiary operates. This demands attention to be paid to avoid conflict between national and corporate culture.