week four - culture and Human Resources in the multinational firm Flashcards
define culture
set of beliefs, values and norms embedded in a human group, which provides it with a common identity and makes sense for the behaviour of its members
characteristics of culture
- it is not innate, it is learned
- it serves as a guide for individuals
- it is shared by the group but different from the personality of individuals
- culture builds a system of inter-related elements
determinants of culture
- climate
- religion
- eduction
- history
- work systems
what is power distance
extent to which less powerful members of organisations accept an unequal power distribution
what does high power distance in a company imply
- managers make decisions in a autocratic way, subordinates accept orders without questioning them
- privileges and status symbols are expected for managers
- high organisation pyramids with many management levels
- wide salary range between top and bottom of organisation
what does a low power distance in a company imply
- managers usually consult subordinates before making decisions, subordinates may question orders
- experience and talent are more important than formal status
- formal titles and positions are not so important for negotiations
- decentralised and flatter structures, few management levels
openness and multi-directional information flows - narrow salary range, managers feel adequately paid
what is uncertainty avoidance
the extent to which people in a society feel threatened by ambiguity
what does high uncertainty avoidance imply
- strong loyalty to the employer, long length of employment in the same company
- highly formalised conception of management: key role of rules and procedures
- preference for tradition, resistance to change and innovation
what does low uncertainty avoidance imply
- weak loyalty to the employer, high mobility across companies
- low formalisation and structuring of activities: key role of common sense
- risk-taking and innovation are encouraged
what is individualism
- people define themselves as independent individuals and make their primary commitments just to themselves
- emphasis on personal initiative and achievement, efficiency, and financial autonomy
- hiring is based on skills and performance
- poor performance is the main reason for dismissal
- treating friends or family better than others is considered unethical
- greater social mobility across occupations
what is nepotism
treating friends or family better than others
what is collectivism
- relatives and friends of the employer are preferred in hiring and promotion decisions
- personal relationships prevail over efficiency in tasks and company goals
- treating friends better than others is normal and ethical
- organisational success attributed to sharing information with the group
- belief in collective decisions
- low social mobility across occupations
what is masculinity
- emphasis on income, mutual competition and performance
- managers are expected to be decisive, firm, ssertive, aggressive, competitive and fair
- career ambitions are compulsory for men and optional for women
- managers are generally ready to prioritise their careers over family
- sickness leave is not popular
- preference for larger companies and higher pay
what is femininity
- emphasis on quality of life, relationships among people and concern for wellbeing of others
- high job satisfaction, freedom, flexibility and low stress
what is indulgence
the extent to which people try to control their desires and impulses based on the way they were raised
what is relatively weak control called
indulgence
what is relatively strong control called
restraint
what is long-term orientation
how every society has to maintain links with its own past while dealing with the challenges of the present and future, and how society priorities these two goals differently
what does a low score in long-term orientation imply
- normative society
- prefer to maintain time-honoured traditions and norms while viewing societal change with suspicion
what doe a high long-term orientation score imply
- encourage efforts in modern education as a way to prepare for the future
what are some correlations with low power distance
- better political practices
- income equity
vice versa for high power distance
what are some correlations with individualism
positively correlated with:
- mobility
- national wealth
what are some correlations with catholic countries
- high uncertainty avoidance
- relatively high power distance
- moderate masculinity
- relatively low individualism
vice versa for atheist countries
what is an expatriate assignment
temporary, work-related stay of a highly qualified professional in a foreign country (usually 1-5 years)
advantages of using the host country managers
- they speak the host language
- continuity is guaranteed
- savings in salaries
- increasing motivation and career opportunities for local employees
- subsidiary is better accepted in the host country
problems of using expatriates
- lack of adaptation to the new culture and environment
- can affect local staff motivation
- negative perception of the subsidiary as a ‘foreign company’
- higher labour costs
why are expatriates used
- qualified managers may not be as widely available in the host country
- the political environment may be unstable in the host-country
- the cultural differences may be high across countries
what is a PCN
parent-country nationality (ethnocentric)
advantages of using PCNs
- organisational control and coordination is maintained and facilitated
- promising managers are given international experience
- subsidiary will comply with objectives
disadvantages of using PCNs
- career opportunities for HCNs become limited
- adaptation to host country may take a while
- PCNs may impose an inappropriate style
- compensation for PCNs and HCNs may differ a lot
what are HCNs
host-country nationality (polycnetric)
advantages of using HCNs
- no language barriers
- hiring costs are reduced /no work permit needed
- better continuity because HCNs stay longer in positions
- government policy may dictate hiring of HCNs
disadvantages of using HCNs
- control and coordination of HQs may be more difficult
- HCNs have limited career opportunities outside of the subsidiary
- hiring HCNs limits foreign experience for PCNs
- hiring HCNs could promote a national unit rather than a global unit
what are TCNs
third-country nationality (geocentric)
advantages of using TCNs
- salary and benefit requirements may be lower
- TCNs may be better informed of the host country than PCNs
disadvantages of using TCNs
- transfers have to consider national conflicts
- host country may not like hiring TCNs
- TCNs may not want to return to their country after the assignment
what are the strategic functions of expatriates
- transfer and acquisition of knowledge
- coordination mechanism (coordinating activities across MNC network)
- control mechanism (direct supervision)
what is meant by the growing importance of inpatriates
managers that are transferred temporarily from the foreign subsidiary to the country where the corporation has its HQs
what are the four steps of the expatriation management process
1) recruitment and selection
2) training and career development
3) compensation
4) expatriation failure and repatriation
what comes under the recruitment and selection stage
- technical qualifications
- leadership skills
- cultural awareness
what is internal and external recruitment
- internal: filling a vacancy in the business from within the existing workforce
- external: filling a vacancy in the business from any suitable applicant outside the business
what comes under the training and career development stage
- in company training
- cross cultural training
- candidate self-training
- conditions for expatriate success
what are three approaches (stages) of training
- information giving approach
- affective approach
- immersion approach
what comes under the compensation stage
- basic salary
- expatriation allowances (cost of living/housing/home leave/education/medical allowance etc.)
- foreign service inducement (hardship caused by assignment)
- taxation
what comes under the expatriation failure and repatriation stage
- high rate of failure (family reasons)
- problems upon return after assignment (loss of status/lack of planning/reverse culture shock)
what can MNCs do to avoid the repatriation problems
- establish the position that will be held upon return
- connect the assignment with career planning
- preserve the expats feeling of belonging to the company
- show evidence that the international experience is well assessed within the company
- offer seminars dealing with repatriation
why is there high resistance to expatriation
- strong attachment to home culture and family
- difficulties upon return
