EFFECTS OF TRADE POLICIES AND TARIFFS

Respond to the following in a minimum of 175 words:

Imagine you are the HR Director for an organization that is planning to do business in one of the countries listed in table 15.2. (United States, Germany, Japan, France, Netherlands, Hong Kong (SAR), Indonesia, West Africa, Russia, Mainland China).

Which of those countries fascinates you the most and why?

According to the information in that table, what are the key cultural differences between the United States and the country you chose? In that other country, how effective do you think each of the following practices will be and why?

Extensive assessment of individual abilities forselection
Individually based appraisal systems
Suggestion systems
Self-managing work teams

PDa

ID

MA

UA

LT

United States

40 Lb

91 H

62 H

46 L

29 L

Germany

35 L

67 H

66 H

65 M

31 M

Japan

54 M

45 M

95 H

92 H

80 H

France

68 H

71 H

43 M

86 H

30c L

Netherlands

38 L

80 H

14 L

53 M

44 M

Hong Kong (SAR)

68 H

25 L

57 H

29 L

96 H

Indonesia

78 H

14 L

46 M

48 L

25c L

West Africa

77 H

20 L

46 M

54 M

16 L

Russia

95c H

50c M

40c L

90c H

10c L

Mainland China

80c H

20c L

50c M

60c M

118 H

Table 15.2

Cultural Dimension Scores for 10 Countries

aPD = power distance; ID = individualism; MA = masculinity; UA = uncertainty avoidance; LT = long-term orientation. bH = top third; M = medium third; L = bottom third (among 53 countries and regions for the first four dimensions; among 23 countries for the fifth). cEstimated. SOURCE: From Geert Hofstede, “Cultural Constraints in Management Theories,” Academy of Management Executive, February 1993, Vol. 7, No. 1, p. 91. Reproduced with permission of Academy of Management, via Copyright Clearance Center.

The second dimension, power distance , concerns how a culture deals with hierarchical power relationships—particularly the unequal distribution of power. It describes the degree of inequality among people that is considered to be normal. Cultures with small power distance, such as those of Denmark and Israel, seek to eliminate inequalities in power and wealth as much as possible, whereas countries with large power distances, such as India and the Philippines, seek to maintain those differences.

Differences in power distance often result in miscommunication and conflicts between people from different cultures. For example, in Mexico and Japan individuals are always addressed by their titles (Señor Smith or Smith-san, respectively). Individuals from the United States, however, often believe in minimizing power distances by using first names. Although this is perfectly normal, and possibly even advisable in the United States, it can be offensive and a sign of disrespect in other cultures.

The third dimension, uncertainty avoidance , describes how cultures seek to deal with the fact that the future is not perfectly predictable. It is defined as the degree to which people in a culture prefer structured over unstructured situations. Some cultures, such as those of Singapore and Jamaica, have weak uncertainty avoidance. They socialize individuals to accept this uncertainty and take each day as it comes. People from these cultures tend to be rather easygoing and flexible regarding different views. Other cultures, such as Page 652those of Greece and Portugal, socialize their people to seek security through technology, law, and religion. Thus, these cultures provide clear rules as to how one should behave.

The masculinity–femininity dimension describes the division of roles between the sexes within a society. In “masculine” cultures, such as those of Germany and Japan, what are considered traditionally masculine values—showing off, achieving something visible, and making money—permeate the society. These societies stress assertiveness, performance, success, and competition. “Feminine” cultures, such as those of Sweden and Norway, promote values that have been traditionally regarded as feminine, such as putting relationships before money, helping others, and preserving the environment. These cultures stress service, care for the weak, and solidarity.

Finally, the fifth dimension comes from the philosophy of the Far East and is referred to as the long-term–short-term orientation . Cultures high on the long-term orientation focus on the future and hold values in the present that will not necessarily provide an immediate benefit, such as thrift (saving) and persistence. Hofstede found that many Far Eastern countries such as Japan and China have a long-term orientation. Short-term orientations, by contrast, are found in the United States, Russia, and West Africa. These cultures are oriented toward the past and present and promote respect for tradition and for fulfilling social obligations.

The current Japanese criticism of management practices in the United States illustrates the differences in long-term–short-term orientation. Japanese managers, traditionally exhibiting a long-term orientation, engage in 5- to 10-year planning. This leads them to criticize U.S. managers, who are traditionally much more short-term in orientation because their planning often consists of quarterly to yearly time horizons.

These five dimensions help us understand the potential problems of managing employees from different cultures. Later in this chapter we will explore how these cultural dimensions affect the acceptability and utility of various HRM practices. However, it is important to note that these differences can have a profound influence on whether a company chooses to enter a given country. One interesting finding of Hofstede’s research was the impact of culture on a country’s economic health. He found that countries with individualist cultures were more wealthy. Collectivist cultures with high power distance were all poor. 16 Cultures seem to affect a country’s economy through their promotion of individual work ethics and incentives for individuals to increase their human capital.

Implications of Culture for HRM

Cultures have an important impact on approaches to managing people. As we discuss later, the culture can strongly affect the education–human capital of a country, the political–legal system, and the economic system. As Hofstede found, culture also has a profound impact on a country’s economic health by promoting certain values that either aid or inhibit economic growth.

More important to this discussion, however, is that cultural characteristics influence the ways managers behave in relation to subordinates, as well as the perceptions of the appropriateness of various HRM practices. First, cultures differ strongly on such things as how subordinates expect leaders to lead, how decisions are handled within the hierarchy, and (most important) what motivates individuals. For example, in Germany, managers achieve their status by demonstrating technical skills, so employees look to them to assign their tasks and resolve technical problems. In the Netherlands, by contrast, managers focus on seeking consensus among all parties and must engage in an open-ended exchange of views and balancing of interests. 17 Clearly, these methods have different implications for selecting and training managers in the different countries.Page 653

Second, cultures may influence the appropriateness of HRM practices. For example, as discussed previously, the extent to which a culture promotes an individualistic versus a collectivist orientation will impact the effectiveness of individually oriented HRM systems. In the United States, companies often focus selection systems on assessing an individual’s technical skill and, to a lesser extent, social skills. In collectivist cultures, by contrast, companies focus more on assessing how well an individual will perform as a member of the work group.

Culture often influences how employees value certain aspects of their work environment. In an interesting study comparing call center workers in India (a collectivist culture) and the United States (an individualistic culture), researchers found that in the United States person–job fit was the stronger predictor of turnover relative to India, where person–organization fit, links to the organization, and links to the community were the stronger predictors of turnover. 18

Similarly, cultures can influence compensation systems. Individualistic cultures such as those found in the United States often exhibit great differences between the highest- and lowest-paid individuals in an organization, with the highest-paid individual often receiving 200 times the salary of the lowest. Collectivist cultures tend to have much flatter salary structures, with the top-paid individual receiving only about 20 times the overall pay of the lowest-paid one.

Cultural differences can affect the communication and coordination processes in organizations. Collectivist cultures, as well as those with less of an authoritarian orientation, value group decision making and participative management practices more highly than do individualistic cultures. When a person raised in an individualistic culture must work closely with those from a collectivist culture, communication problems and conflicts often appear. Much of the emphasis on “cultural diversity” programs in organizations focuses on understanding the cultures of others in order to better communicate with them.

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