Role of Cultural Factors in Shaping Human Resource Management

This report examines cultural and institutional factors of Mexico and how they can impact global HR management and practices. Specifically, by analyzing Mexican culture based on Hofstede’s dimensions, economy, labor legislation, union and employment tradition we reached the conclusion that the features of Mexican culture (high power distance, strong collectivism, high level of masculinity and uncertainty avoidance) and institutional factors have a strong impact on management styles and HR practices of business in Mexico and may arouse some challenges for global company and their expatriates, especially those from countries that bear different cultural features and institutional conditions. In order to minimize the potential conflict between Mexican local employees and expatriates, parent companies need to provide trainings (culture assimilation, country condition, etc.) before sending anybody to Mexico. Also, whether the expatriates should put more effort to disseminate home country (headquarter) culture or to adjust to local culture depends on the company’s strategy in terms of being localized or standardized around the globe.

It is hypothesized that cultural differences in behaviour will mean differences in HRM practices within different cultures but those within the same cultural cluster will be similar whereas those in different clusters will be dissimilar. Employees and managers from different cultures take decisions in different ways – the processes, behaviours and values are not the same. People have different value orientations as a result of individual psychology, life-stage and generation and assumptions about behaviour determined by cultures are linked to a variety of organisational behaviours.

While there are many various global issues that affect the International Human Resource Management to run efficiently, there are two key concepts that play a major role in understanding how to approach them with cohesive and a well coherent strategy; they are the International Human Recourse Management Strategy and Understanding the Cultural Environment. In the International Resource Management strategy, many companies will do their research in finding companies that offer the

Mismanaging cultural differences can render otherwise successful managers and organisations ineffective when working across cultures. As stated byOsland (1990, p. 4) ``The single greatest barrier to business success is the one erected by culture''. Hofstede (1983) defines culture as "the mental programming of the mind which distinguishes the members of one human group from another" (Hofstede 1983 p. 25). Through the comparison of Chinese culture and Australian culture using Hofstedes five cross-cultural dimensions: power distance, uncertainty avoidance, masculinity, individualism, and long-term orientation an insightful view into the differences and similarities of the cultures can be obtained (Chong & Park 2003). Human Resource Management

Increased business globalization, emergence of new economic hubs like BRIC countries (Brazil, Russia, India and China) as well as more intense competition among organizations at the domestic and international level alike over the past two decades, have necessitated the need for studies in the comparative Human Resource Management (HRM) (Budhwar & Sparrow, 2002a). As a result, a growing number of conceptual (Aycan, 2005; Edwards & Kuruvilla, 2005) and empirical studies (Bae, Chen, & Lawler, 1998; Budhwar & Sparrow, 2002b; Easterby-Smith, Malina, & Yuan, 1995) have addressed the configuration of HRM in different

Potential influence of Organization’s Culture on the ability of organizations to obtain positive HRM outcomes

The International Human Resource Management (IHRM) is about the global management of human assets (e.g. Adler and Ghadar 1990; Brewster 2002). The motivation behind IHRM is to empower the firm, the Multinational Enterprise (MNE), to be prosperous globally. This necessitates being competitive globally, efficiency, locally reactive, versatile and responsive within a moment’s notice, and proficiency in exchanging information and knowledge over extensively scattered units. These necessities are momentous, and the extent of the reality is undeniable: for instance, a significant number of companies worldwide are under perpetual competition from competitors (Bartlett and Ghoshal 1998). On the other hand, the majority of the developing markets are under constant barrage by foreign direct investments (FDIs) and by the MNEs of developed countries (UNCTAD 1999).

Schuler and Rogocsky (1998, p.10) suggested, "that national culture provides an important explanation for the variance in the utilisation of different compensation practices in different countries". This example shows the strong bond between national culture and his impact on HR practices and HRM. The apply of specific HR practices and HRM policy has to fit the cultural values to be effective in the work environment. Considering this fact, national values have a real impact on HRM that means national variations can influence HRM policy of a company in the global economy. Considering the current economy, national variations can offer particular advantages or disadvantages. The impact of national variations can appear in four main areas of HRM which are human resources practices, management and bargaining with trade unions, level of state involvement in the labour world, management of relationships between employees and managers. A national value turns into a disadvantage when this value does not fit with the global economy. On the opposite, if the national value fits with the economy it can be an advantage for HRM and the business strategy of the company. A national variation between two countries becomes an advantage or disadvantage when it promotes or prevents the adaptation of the HRM policy of the company to the current economy. HR practices are in some extent adapted to national variations in order to fit employees needs. Schuler and

In this changing world, our global business theories and literature have implications toward the future. The future of this growth and success depends largely on the key component which is Human Resource Management. So, we as researchers hope to enlighten and inform you as employers the significance of an effective solution that both understands your employees and is beneficial to your company. That is why we offer our recommendations in the end of this article based on our findings.

In the last decades, small national companies have grown in amazing scale all around the world. Companies that once were family owned have become huge multinational corporations. Corporations, which by the side of globalization, have expanded all around the world. International business has become one of the most important areas of business due to the need for companies to expand to markets outside their borders. Companies have had the need to adapt to another cultures and business systems. At the same time the way human resource management works has changed. Multinational corporations have had to adapt to new human resource requirements in order to be more effective and efficient. The business

The first step in solving the problem is to understand the problem. In this case, the company's employees are dispersed around the world, work remotely, but required a high degree of cooperation. It is clear that at present these teams are not functioning well. Some of the problems that have been identified are a general lack of teamwork and common vision, poor coordination and communication, cultural gaps and trust gaps. The equipment problems at this point should be isolated from the discussion. Technology problems can be dealt with later when they can be communicated accurately. The human resources issue will be the primary focus on this paper.

Therefore, to strengthen the labour markets, multinational companies should focus their human resource management mainly on how management practices varies from one region to another and talent development. This report is intended for global managers of HSBC Holdings as one of multinationals that operates in many countries. Generally this report’s purpose is identifying how management practices can be varied and talent development issues in one of the biggest emerging markets, namely India. As management practices can be diffused or in need to be altered to suit the local country and also what the global managers of HSBC need to be aware of in developing the talent of their labours, global managers need to look upon the local’s context of HRM in this case is India. India opened their markets for foreign firms to enter their market in the early 1990s that was due to the liberalisation of their economy. These foreign firms tend to have superior and more efficient HRM systems than India’s firms. Budhwar & Varma (2010) state:

In the face of globalization, organisations struggle to develop the human resource management strategy (HRMS) between global integration and local differentiation. This is regarded as a critical concern for multinational enterprises (MNEs) since they suffer from cultural and institutional differences to integrate HRM practices and shape HRM activities to operate abroad. Regarding that, each cultural and institutional factors are developed over its history with unique insight into managing the organisation, the

Generally, culture can be viewed as the behavioural norms within a group of people sharing common ethnicity, beliefs, education, historical background, location or institutions. It is widely the accepted behaviour in a group and likely the most striking or peculiar form of behaviour noted by a foreign member new in the group. Considering this, multinational corporations (MNC) must be highly sensitive towards cross cultural management in order for them to expand, implement their strategies and achieve their goals in domains outside their home.

Given that the essential mission of a human resources management department is to maximize employee contribution in service of an employer 's strategic objectives we could say that therefore managing employee performance is one of the core mission of a human resources department. (Johnason, 2009). Some changes in the business environment such as globalization and deregulation of markets are fostering companies’ internationalization. At the same time the decreasing barriers for new entrants is significantly increasing the competitiveness. To succeed in a highly competitive and international environment is nowadays more important than ever to maximize employee performance. In this report we are going to see how we can improve