Q1. Why study international and comparative HRM?

Mention the triggers and drivers of

Comparative HRM.

A: The world we live in is now organisationally dependant. Real flow of

business activity is insignificantly impacted by national borders. A good
example of organisational dependency is the credit crunch which started in
Amerca but affected businesses all over the world. Hence, a major challenge
faced by the business people today is the tension between the globalizing
power of business and the localizing power of culture and politics. It is
thought that a good understanding of how to manage across cultures will
enable decision makers and managers to make more informed and effective
economic and political decisions.

Thus, the main reasons why it is necessary to study international and

comparative HRM are:

1. The realisation that the efficient management of human resources is a

key success factor for international organisations in different
countries. Human Resources is becoming more important than ever
before. For instance, Ford has one-third of its workers from overseas.
Therefore, efficient management of human resources from different
countries is pivotal to the success of an international organisation like
Ford.

2. The composition of international organisations’ workforce is

becoming more diverse than ever not just in terms of their employees
but management as well. A good example of an international
organisation with a diverse workforce is Phillips. Three quarter of the
workers of Phillips are from outside Holland.

3. More and more companies are dependent on managers from different

cultures and nationalities operating in different countries. Examples
can be taken from IBM which has large scale operations in India.

4. The free movement of labour within and between continents and

countries. After the formation of EU, many Eastern European workers
have migrated to the United Kingdom to work in factories and
vegetable farms. To manage these labours, understanding of
comparative HRM is essential.
 5. The recruitment and retention of a highly qualified and competent
workforce is crucial in a knowledge-based and competitive business
environment. In the 1980s many Indians went to U.S.A because
U.S.A had a dearth of computer programmers. To retain these skilled
employees the companies must be aware of comparative HRM.

6. Increasing mergers and strategic alliances that require different

managers and workers from different cultures and backgrounds
having to work together. A good example is the 2006 merger of
Arcelor and Mittal Steel.

7. Internationalization goes beyond multinational companies to involve

every organisation that operates internationally.

The Triggers

1. Consumerism, privatisation and free market economies. In the 1980s,

privatisation lead to more competition and as choices became more, it
gave rise to consumerism. Consumerism lead to the popularity of
HRM. As more was consumed, more was produced.
2. New products required new and more supplies of raw materials
and cheaper and more effective ways of production. Demand for raw
materials increased due to consumerism. Thus more raw materials
were outsourced from different countries.
3. Expatriates failure to achieve their assignments. In the 1980s
expatriates failed to complete their assignments in foreign land due to
food, weather, culture etc. It was realised that ignorance of local
culture was the main reason behind their failure. As they were not
trained internationally, they could not mingle with the locals. Thus
international and comparative HRM became important.
4. Economic Recession in the 1980s. Due to it, many Western
companies moved to the East. So it became important to understand
cross-cultural management.
5. The rise and success of South East Asian Countries (Japan and then
the tigers). Japan was completely ruined in 1945, after WWII. Within
1950, Japan became self-sufficient. By 1955, they looked for market
outside their country.The reason behind their success is the successful
management of HR. Their management style is admired by the West.
They learned people management leads to success from Japan.
 6. The openness of China and later India to the West. In 1979, China
opened its door to the West. Investment abroad and from abroad were
welcomed. Many countries wanted to invest in China due to its huge
workforce, government controlled cheap workforce, cheap wages, etc.
China now produces almost everything for the outside world. India
became the labour provider of the world. The labour cost is very
cheap in India.
7. The end of the Cold War and the “Westernisation” of Eastern Europe

The Drivers

1. Growth and spread of multinational companies. Example: McDonalds

is present even in China
2. Open trading and international competition (in search of excellence).
MNCs need to adapt to new cultures. Companies are now competing
with other global companies. Anything produced has to be better than
the competitors.
3. Regional economic and political integration. Example: EU, NAFTA,
ASEAN, SAARC etc
4. Technical changes and international mobility of information ( also
new markets through world wide web).
5. Political and cultural influence.( Global Media. Due to it everyone
hears the same news through television channels like BBC World and
CNN)
6. Internationalisation of Western management education and
international use of English as the language of business
7. The liberalisation and democratisation of Less Developed Countries
(Reforms and Foreign Investments).

The Barriers

1. Cultural and religious differences

2. Ideological and political conflict
3. Historical trends (colonisation, civil wars, etc)
4. Economic recessions
5. Financial/currency crisis
6. Terrorism
7. Natural disasters
Q2. What are the cultural dimensions of Gerth Hofstede? Discuss each of
this dimension in terms of HRM. Explain each dimension in terms of what
we have learned in the lecture. For example: In Africa due to collectivism
recruitment and selction is based on nepotism and cronyism. In the Western
countries, individualism affect HRM practices.

Anwer: Gerth Hofstede defines culture as “collective mental programming

of the people in an environment”. Gerth Hofstede’s cultural dimensions are
power distance, uncertainty avoidance, individualism-collectivism and
masculinity-feminity.

Power distance: It measures the extent of acceptance by the society that

there is an unequal distribution of power in institutions and organisations.
Hofstede’s research found that, countries like Mexico, India, France etc has
a high power distance. Some common characteristics of countries with large
power distance are: they maintain a hierarchy within organisations which
symbolises inequality. Superiors are inaccessible to the subordinated. They
are the privileged group. Superiors and subordinates consider each other as
people belonging to different group. For example in India, top managers
never stand in queues or eat in the same cafeteria as subordinates. Countries
with low power distance include Great Britain, Sweden, Denmark, USA, etc.
They believe in equality of all. Legitimacy of power is verified and the good
or evil consequence of exercising power is judged. People try to look less
powful than they actually are. This enables the English speaking majority of
USA and Canada to mingle easily with the Spanish, French and other
language speaking minorities. The subordinates are allowed to freely voice
their opinions in organisations.

Uncertainty avoidance: deals with a society's tolerance for uncertainty and

ambiguity. It indicates to what extent a culture programs its members to feel
either uncomfortable or comfortable in unstructured situations. Unstructured
situations are novel, unknown, surprising, different from usual. Uncertainty
avoiding cultures try to minimize the possibility of such situations by strict
laws and rules, safety and security measures, and on the philosophical and
religious level by a belief in absolute Truth. People in uncertainty avoiding
countries are also more emotional, and motivated by inner nervous energy.
The opposite type, uncertainty accepting cultures, are more tolerant of
opinions different from what they are used to; they try to have as few rules
as possible, and on the philosophical and religious level they are relativist
and allow many currents to flow side by side. People within these cultures
are more phlegmatic and contemplative, and not expected by their
environment to express emotions.

USA, Finland, Germany, Norway, Canada are countries with low

uncertainty avoidance. They are very open to changes and takes decisions
quickly. Strong uncertainty avoiding countries include Austria, Greece,
Japan, Italy and others. The Japanese think carefully and takes time before
taking any decisions. They also have stricter laws and regulations to avoid
uncertainty.

Individualism Vs Collectivism

On the individualist side we find societies in which the ties between

individuals are loose: everyone is expected to look after him/herself and
his/her immediate family. On the collectivist side, we find societies in which
people from birth onwards are integrated into strong, cohesive in-groups,
often extended families (with uncles, aunts and grandparents) which
continue protecting them in exchange for unquestioning loyalty. The word
'collectivism' in this sense has no political meaning: it refers to the group,
not to the state. Again, the issue addressed by this dimension is an extremely
fundamental one, regarding all societies in the world. Individualist countries
are USA, Canada, GBR among others. People in organisation focus more on
their individual performance and tend to not use their full potential when
working in group. In the Western countries, individualism affect HRM
practices. Nigeria, India, China are collectivist countries. In Africa due to
collectivism recruitment and selction is based on nepotism and cronyism.

Masculinity Vs Feminity
Masculinity (MAS) versus its opposite, femininity, refers to the distribution
of roles between the genders which is another fundamental issue for any
society to which a range of solutions are found. The IBM studies revealed
that (a) women's values differ less among societies than men's values; (b)
men's values from one country to another contain a dimension from very
assertive and competitive and maximally different from women's values on
the one side, to modest and caring and similar to women's values on the
other. The assertive pole has been called 'masculine' and the modest, caring
pole 'feminine'. The women in feminine countries have the same modest,
caring values as the men; in the masculine countries they are somewhat
assertive and competitive, but not as much as the men, so that these
countries show a gap between men's values and women's values.

Japan is a highly masculine country. Men are the top decision-makers.

Female employment is very low in Japan. They still seen as more suited to
perform household chores rather than work in offices. Feminity is common
in Scandanavian countries, for example, Denmark, Sweden, Norway etc.
Female employment is high in those countries and they are not seen
differently than men.

.
Q3. Compare Labour Markets between two countries. China will be one for
sure.

Q4. Compare HRM practises like recruitment and selection procedures

between two countries.