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Global Human Resource Management (HRM)

I need help with the following:

Select a non-North American based organization that conducts business in at least two non-North American countries. Examine the cultural and regional differences impacting global HRM within that organization

The organization I chose is Nestle and the countries are India and China. Can you please help?

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Hi,

Interesting question. Let's take a closer look. For convenience, I attached information of China and India, including maps which illustrate the different regions that also have some different cultural differences that impact HRM. There are often some uniques cultural differences for a country (China or India) or larger region (Eastern Asia), however regional differences also exist and need to be given attention to. So, it depends, in part, where your organization (Nestle) plans to set up business.

One approach to help you with an assignment like this is to look at relevant information for each country, which you can draw on for this you final copy. This is the approach this response takes.

Let's take a closer look.

RESPONSE:

1. Select a non-North American based organization that conducts business in at least two non-North American countries. Examine the cultural and regional differences impacting global HRM within that organization. The organization I chose is Nestle and the countries are India and China. Can you please help?

India and China are interesting countries of choice, with many different cultural and regional differences that could impact Human Resource Management (HRM) in your organization of choice (Nestle). An interesting quote:

"Culture is more often a source of conflict than of synergy. Cultural differences are a nuisance at best and often a disaster." - Dr. Geert Hofstede

One source to draw on is Dr. Geert Hofstede's cultural analysis of countries, which is often helpful in an assignment like this one. He conducted perhaps the most comprehensive study of how values in the workplace are influenced by culture. From 1967 to 1973, while working at IBM as a psychologist, he collected and analyzed data from over 100,000 individuals from forty countries. From those results, and later additions, Hofstede developed a model that identifies four primary dimensions to differentiate cultures (Power Distance, Individualism, Masculinity, Uncertainty Avoidance and Long-Term Orientation - see descriptions and scores differentiation between India and China attached in separate file). This fifth latter dimension, Long-term Outlook, was added later. As with any generalized study, the results may or may not be applicable to specific individuals or events. In addition, although the Hofstede's results are categorized by country, often there is more than one cultural group within that country. In these cases there may be significant deviation from the study's result. An example is Canada, where the majority of English speaking population and the minority French speaking population in Quebec has moderate cultural differences. However, Geert Hofstede's dimensions analysis can assist organizations and/or the businessperson or traveler in better understanding the intercultural differences within regions and between counties.

Geert Hofstede Analysis is discussed on each Country with the following format:

1. Power Distance Index (PDI) focuses on the degree of equality, or inequality, between people in the country's society. A High Power Distance ranking indicates that inequalities of power and wealth have been allowed to grow within the society. These societies are more likely to follow a caste system that does not allow significant upward mobility of its citizens. A Low Power Distance ranking indicates the society de-emphasizes the differences between citizen's power and wealth. In these societies equality and opportunity for everyone is stressed.

2. Individualism (IDV) focuses on the degree the society reinforces individual or collective, achievement and interpersonal relationships. A High Individualism ranking indicates that individuality and individual rights are paramount within the society. Individuals in these societies may tend to form a larger number of looser relationships. A Low Individualism ranking typifies societies of a more collectivist nature with close ties between individuals. These cultures reinforce extended families and collectives where everyone takes responsibility for fellow members of their group.

3. Masculinity (MAS) focuses on the degree the society reinforces, or does not reinforce, the traditional masculine work role model of male achievement, control, and power. A High Masculinity ranking indicates the country experiences a high degree of gender differentiation. In these cultures, males dominate a significant portion of the society and power structure, with females being controlled by male domination. A Low Masculinity ranking indicates the country has a low level of differentiation and discrimination between genders. In these cultures, females are treated equally to males in all aspects of the society. There are high gender differences in both India and China (see scores below). this needs to be considered when working in these countries and these cultural differences need to be respected.

4. Uncertainty Avoidance Index (UAI) focuses on the level of tolerance for uncertainty and ambiguity within the society - i.e. unstructured situations. A High Uncertainty Avoidance ranking indicates the country has a low tolerance for uncertainty and ambiguity. This creates a rule-oriented society that institutes laws, rules, regulations, and controls in order to reduce the amount of uncertainty. A Low Uncertainty Avoidance ranking indicates the country has less concern about ambiguity and uncertainty and has more tolerance for a variety of opinions. This is reflected in a society that is less rule-oriented, more readily accepts change, and takes more and greater risks. Both China and India have higher levels for uncertainty and ambiguity (rules and law oriented, which also plays out in business, and needs to be considered in HRM).

5. Long-Term Orientation (LTO) focuses on the degree the society embraces, or does not embrace, long-term devotion to traditional, forward thinking values. High Long-Term Orientation ranking indicates the country prescribes to the values of long-term commitments and respect for tradition. This is thought to support a strong work ethic where long-term rewards are expected as a result of today's hard work. However, business may take longer to develop in this society, particularly for an "outsider". A Low Long-Term Orientation ranking indicates the country does not reinforce the concept of long-term, traditional orientation. In this culture, change can occur more rapidly as long-term traditions and commitments do not become impediments to change (URL: http://www.cyborlink.com/besite/hofstede.htm ).

Considering the definitions above for each dimensions, Hofstede Scores for India, China and United States (for comparison only):

1. India:

Power Distance (77); Individualism (48), Masculinity (40), Uncertainty Avoidance (56) and Long-Term Orientation (61)

2. China:

Power Distance (80); Individualism (20), Masculinity (29), Uncertainty Avoidance (57) and Long-Term Orientation (118)

3. United States:

Power distance (40); Individualism (91), Masculinity (46), Uncertainty Avoidance (62) and Long-Term Orientation (29)

Briefly, these scores suggest a moderate difference between the two countries (China, India), but compared to the United States cultural score, they differ significantly. So, if your headquarters will be in United States, this will impact HRM decisions. Both China and India have little tolerance for risk as shown by the Uncertainty Avoidance scores (56, 57), and somewhat lower than Untied States (62). China (20) is more collective than is India (48), shown by Individualism scores, perhaps because of communism regime, but India's score of 48 is still comparatively higher than the world average and United States (91), which suggests family and 'group' orientation as well, albeit less than China. Loyalty in a collectivist culture is paramount. These types of things need to be considered when working with employees as well as business communication, dress, and the likes (see below). Power distance illustrates that the government has more power in India (77) and China (80), and less individual freedom than in United States (40). This also needs to be considered when dealing with people from these countries.

Let's take a more in-depth look. Although there are some general cultural differences overall, as part of eastern Asia, there will be regional cultural differences, so it depends on where you business in located.

CHINA

The People's Republic of China (PRC) is located in eastern Asia. It is the third largest country in the world and occupies an area of 3,705,406 square miles, including the island of Taiwan, which is claimed by China. Mainland China has a 3,588-mile coastline, from the Gulf of Tonkin adjoining Vietnam in the south to the Yalu River adjoining North Korea. Beijing, China's capital city ...

Solution Summary

This solution selects a non-North American based organization (Nestle) that conducts business in at least two non-North American countries (India and China) and examines the cultural and regional differences impacting global Human Resource Management (HRM) within that organization. Supplemented with articles on doing business in China and India.

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