Behavior Across Countries

Human resource practices, too, vary across cultures.

Here are some representative examples.

a) The concept of an hourly wage plays a minor role in Mexico. Labour law requires that employees receive full pay for 365 days a year. In Australia and Brazil, employees with one year of service are automatically given 30 days of paid vacation.

b)

c)

In Japan, remuneration levels are determined using the objective factors of age, length of service, and educational background rather than skill, ability, and performance. Performance does not count until after an employee reaches 45 yeas of age.

d)

In the UK, employees are allowed up to 40 weeks of maternity leave, and employers must provide a government mandated amount of pay for 18 of those weeks. In India, a woman employee is entitled for full wages during the previous six weeks and the subsequent six week period of pregnancy, and the employer is bound to pay the amount.

In 87 per cent of large Swedish companies, the heads of human resources are on the board of directors. The differences are glaring in performance appraisal. The head office of the MNC had established the criteria to be used for appraisal in its subsidiaries.

e)

But the prioritization of the criteria was left to the subsidiaries. As a result, the outcome of the evaluations could be quite different from country to country, because what was regarded as the most important criterion in one subsidiary might be ranked much lower on the evaluation list of another. The MNC actually used the HAIRL system of appraisal.

The five criteria in this acronym stood for: (a) Helicopter the capacity to take a broad view from above; (b) Analysis the ability to evaluate situations logically and completely; (c) Imagination the ability to be creative and think outside the box;

(d) Reality the ability to use information realistically; and (e) Leadership the ability to effectively galvanize and inspire personnel. When Shells subsidiaries were asked to prioritize these five criteria from top to bottom, the results were as follows:

Netherlands

France

Germany

Britain

Reality Analysis Helicopter Leadership Imagination

Imagination Leadership Helicopter Analysis Leadership Analysis Reality Imagination Reality Analysis

Helicopter Imagination Reality

Helicopter Leadership

Obviously, employees in different subsidiaries were being evaluated differently.

Culture Determines Behavior

Culture may be understood as the pervasive and shared beliefs,. Norms, and values that guide the everyday life of individuals. These beliefs, norms, and values are passed on to future generations through cultural rituals, stories, and symbols.

practices. That is, they tell is what we can do and what we cannot. For example, norms prescribe when and whom we can marry, and what clothes we can or cannot wear to a function or to the office. Cultural values tell us what is most dear to our hearts.

Cultural norms prescribe behaviors and

Americans, for example, value freedom most freedom to choose ones own destiny whether it leads to success or failure. Japanese culture, on the other hand, finds a higher value; in belonging; one must belong to and support a group in order to survive. Belonging to a group is more important than individualism.

Arab culture, on the other hand, is less concerned with individualism or groupbelonging, concentrating instead on their own family security and relying on god for destiny. Individual identity is usually based on the background and position of each persons family.

Cultural symbols, stories, and rituals. It is

important to communicate the norms, values, and beliefs of a society or a group to its members. Culture is passed from one generation to another through tits symbols, stories, and rituals. Culture is continuously reinforced when people see symbols, hear stories, and engage in rituals.

Another key features of culture is that cultural values, norms, and beliefs are shared by a group of people. The group must accept that these norms, values, and beliefs are by and large correct and compelling.

This means that although people in any culture do not have the same way all the time, culture makes behavior predictable most of the time. Marriage in India, for example, makes a woman wear certain things like Mangala sutra which a married female in western or American culture is not expected to do so.

Cultural values also have a major influence on the way people relate to each other and also to what they aspire for in a job. In many hierarchical cultures the meaning and value of a job lies more in the status than in the pay packet.

In these cultures, people also expect recognition for their seniority and age. On the other hand, in more egalitarian cultures (e.g. US, Germany, etc.) people expect rewards and compensation for their performance rather that for their seniority.

That culture influences behavior and human resource practices is stating only part of the story. Its impact stretches beyond and determines the type of business a society engages in. for example, French culture is known for its emphasis on elegance, elitism, and concern for form.

Not only does this get reflected in its 1200 museums, its 5000 varieties of wine more than 50,000 drama performances per year but also in the fact that France has always been the capital of fashion industry.

On the other hand, Mexican culture is known fort its pro-death values. Mexicans celebrate the Day of the Dead, have folk art forms which feature skeletons, adorn the graves a s a work of art and even have a popular magazine called La Calavera (meaning The Skeleton)! Not surprisingly, life insurance is not a flourishing business in Mexico.

In the mid -1990s, less than 20 Per cent of the employed population had life insurance cover, and the insurance premium formed just about 1.5 percent of the GDP (as compared to 5.5 per cent in Brazil , and close to 9 per cent in the U.S).

Besides, the cultural values of the society define the meaning and reason of business and how it is organized. In many cultures, high profits and market capitalization are not criteria for doing business.

In many Arab and Latin countries (e.g., Italy, Spain, Latin American countries, Saudi Arabia, etc.) the business firm is seen as an extension of the famil7y and family honor comes before profits. Similarly, in France, business firms are culturally seen as social institutions which uphold national pride.

Such cultural differences have a direct impact on the strategic orientation of companies across cultures. For instance, one study of comparison between the financial and strategic focus of US and Japanese companies found that while US companies emphasized more on profits, dividends, and stock prices, the Japanese companies focused more on new product development and market share.

The cultural values also influence how the business is organized and conducted in a society. In collective societies (e.g. China, Saudi Arabia, Spain, etc.), for instance, personal contacts play an important role in conducting business.

The guanxi system in China encourages people to conduct business based on personal relationships. This is in sharp contrast to more individualistic societies where personal relationships are deliberately kept away from professional relationships.

Similarly, keiretsu of Japan. A keiretsu normally consists of a network of trading companies, manufacturing companies, banks insurance companies, and many satellite manufacturing units. What binds them together are a number of business linkages, such as interlocking shareholding, intra-group loans, and intra-group trade.

The close-knit nature of the keiretsu helps the group to avoid hostile takeover, share knowledge, avoid redundancies by reallocating people within the group, keep prices in control through preferential buying, and so on. The structure and working of keiretsu clearly reflect the Japanese values of collectivism and interdependence.

Culture Clusters
Cultural clusters represent countries that share cultural similarities.

International businesses utilize the cultureclustering approach in formulating their global strategies. Many firms from New Zealand focus their first exporting efforts on Australia. Hong Kong firms have been very successful in exploiting Chins markets. Canadian firms are more comfortable working with British partners than are Japanese firms.

Improvements in communication and transportation have made clustering possible. Thanks to cable and satellite TV, people in different parts of the world watch and enjoy the same entertainment programmes and serials. Lower airfares generated by increased airline competition mean that more tourists can learn firsthand about other cultures.

MNCs facilitate this process of cultural convergence, for better or for worse, through their advertisements that define appropriate lifestyles, attitudes, and goals and by bringing new management techniques, technologies, and cultural values to the countries in which they operate.