Objectives

• What is ‘cross culture Human Resource Management’? Definition of

‘cross culture Human Resource Management’ will give you a broad
outline about what is in this subject? You will also learn about PCNs,
HCNs. and TCNs.
• Why is the study of cross culture Human Resource Management
important for businesses?
• How the course or practice of Human Resource Management is
studied, understood or approached? It is discussed under the head ‘
Approaches to International Human Resource Management’
Structure
• Introduction
• Meaning of Cross-culture HRM
• Evolution of Cross-culture HRM
• Relevance of Cross-culture HRM
• Difference between Domestic HRM and Cross-culture HRM
• Models of cross cultural HRM -Matching model, Harvard Model,
Contextual Model, 5P Model European Model;
• Cross cultural HRM Strategies; Barriers in effective cross cultural HRM;
Organizational dynamics and cross cultural HRM; Role of culture in cross
cultural HRM; Culture and employee management issues.
Introduction
• International business is dynamic. Markets are now open for
competition from both domestic and foreign firms. A large proportion
of workforce are located in other countries away from their homes
and home countries.
• For example, Ford Motor Company has half its employees outside the
United States, Philips has three-fourths of its employees working
outside the Netherlands and more than half of Ericsson’s workforce is
located outside Sweden.
• Issues of managing business are becoming more and more complex in
the same pace as globalization is taking placing.
• The unusual level of foreign competition in both domestic and
foreign markets is forcing businesses to find and retain the
competitive advantage.
• Finding and nurturing the suitable and capable human resources in
the context of high competition at both domestic and international
levels is high on the list of priorities of the top managements.
Quality human resources are a must for implementing global
competitive strategies.
• Firms expanding into international markets are put under additional
pressure to manage their limited resources and for such firms
managing human resources is more essential than any other firm.
Any problem is either created by people or must be solved by
people. Having right people in the right place at the right time is key
to a company’s international growth.
Cross-culture management

CULTURE (Meaning)
• Culture is the configuration of learned behavior and result of behavior
whose components are shared and transmitted among the members of a
society.
• It is a relative that guides the behavior of people and society and is passed
across generations.
• It describes the Dos and Don'ts, binding a person who is member of the
society
• A group phenomenon
Elements of culture
• Language
• Nationality
• Education
• Profession
Culture of
• Gender countries (pg.
• 8-9)
Religion
• Social class
• Norms
• Values
Characteristics of culture
1 Culture is shared 6 Culture is Dynamic

2 Culture is learned 7 Culture is universal

3 Culture is unconscious

4 Culture is Symbolic

5 Culture is way of life

Role of culture in international
business
Walt Disney in Paris
1992 The Walt Disney one of the world’s leading media and entertainment
conglomerates, opens a theme park named Euro Disney in Paris. It is designed to be
the biggest and the most lavish Disney theme park in the world.
1994 Euro Disney incurs lossed of $900 million since its opening. Euro Disney renamed
Disneyland Paris. Many changes introduced. Fluctuating financial performance
continues.
2005 Disneyland Paris is on the verge of Bankruptcy. Walt Disney studio the newest
addition to Disneyland in, is a flop. The French government rescues Disneyland with
a financial package.
2008 Disneyland shows its first profit in years.
• Major contributor to Disney’s performance in France: Lack of sensitivity to French
and European culture. Imposition of the ‘American Way’ in Disneyland Paris.
Question
• Why did the biggest entertainment media companies in the world
failed ?
• While strategy and implementation have been recognized by analysts as
some of its casual factors, a major contributor to this major failure was lack
of understanding of the international culture.
• French have always been proud of their culture and they saw this as an
invasion of the US pop culture. They had lack of knowledge on European and
French cultures.
• The Euro Disney restaurant did not had much seating capacity but
Europeans like eating their meals sitting down in a restaurant, but Americans
eat fast food on the move.
• Europeans are used to walking whereas Americans drive everywhere. Euro
visitors did not use the expensive tram system installed at Euro Disney.
VIDEO
• CULTURAL DIFFERENCE:
https://www.youtube.com/watch?v=VMwjscSCcf0
Globalization
• The process by which national economies are increasingly woven together
worldwide.
• The world is flattening, and has lead to many cross-culture business
activities than ever before. A business manager today will
• Travel to different countries to meet business associates.
• Be associated with joint ventures, mergers and acquisitions with foreign companies
• Outsource or off-shore business.
• Communicate with people from different countries through business and social
networks
• Be a part of virtual team
• Participate in international conferences
GLOBALIZATION
• Relocate with family to a new country.
• Tour foreign countries with friends and family.
• Global trade has increased with many trading blocks in the world
including European Union (EU), North American Free Trade
Agreement (NAFTA), ASEAN, African Economic Community (AEC).
GLOBALIZATION AND INDIA
• The economic liberalization of India in 1991created impetus to many
Indian companies to go global.
• The Indian Conglomerate TATA has made over 35 global acquisitions
over the decade 2000-2010, now its spread in more than 100 countries.
• Asian Paints have manufacturing facility in more than 15 countries.
• TCS has 142 offices in 42 countries.
• Public companies like ONGC is participating in projects in more than 18
countries.
• Infosys has foreign nationals on its Board of Directors
Manager’s awareness of cross-
culture
• Legal systems
• Political risks
• Economic risk
• Infrastructure and Technology
• National culture
LEGAL SYSTEM
• In India, US and many other English colonies, common law is practiced. Law is
based on the past court decisions and common customs.
• In France and Germany and other continental countries, civil law is practiced. Law
is based on comprehensive set of code and statues.
• Islamic law is practiced in many middle east countries like Saudi Arabia, Libya and
Iran.
POLITICAL RISKS
• Any government actions or political events which are likely to affect
business of a firm.
• Terrorist attack by any extremist group can put a nation in high-risk
category, keeping away from foreign investors. The US war in Iraq,
destroyed the economy of Iraq, thus restricting the trade. Other
political risks includes:
• Loss of technology or intellectual property
• Corruption among government officials
• Barriers to repatriation of funds
ECONOMIC RISKS
• A country’s ability or intention to meet its financial obligations
determines its economic risk.
• When government abruptly changes the fiscal or monetary policy, or
the investment policy, the profitability of the firm is also impacted.
Exchange rates impact the balance sheet.
• When Russian Rubel was devalued in 1998, Russian companies could
no longer import equipment's or raw materials for their production,
but foreign companies could purchase Russian raw materials at low
price.
INFRASTRUCTURE AND
TECHNOLOGY
• The strategies of a firm entering a country depends upon its
infrastructure available. There is a big difference in doing business in
Japan and Bangladesh.
• A sophisticated supply chain management cannot work if the roads
are not proper and in place.
• Total production management (TPM) cannot work if basic amenities
like stable power and water supply are missing.
• A country without adequate telecommunication infrastructure will be
crippled in its development.
NATIONAL CULTURE
• National Culture influences management practices.
• Pankaj Ghemawat, a well known Harvard Business School professor,
has created CAGE framework, which helps in determining the
similarities and differences between countries. More the similarity
along the dimension, greater the ease of doing business between
them.
CULTURE
• Culture can be defined as a patterned way of thinking, feeling,
reacting that exists within a particular group, organization, profession,
sub group of a society, nation or group of nations.
• Hofstede defined culture as ‘the collective programming of the mind-
software of groups in the society’. Culture is learned, not innate
• Tangible culture: Food, dress, dance, architectures and other art
forms.
• Intangible culture: Beliefs, attitude, role definition, norms and values.
Institutional culture
• At institutional level, the size of the organization, type of industry,
corporate culture, function plays an important role. Other factors at
institution level includes:
• Size of the firm: The larger the firm, the more bureaucratic its system
will be.
• Corporate culture
• Professional background: different professions have their own
cultures regardless of nationalities. Doctors across the world have so
much in common.
CROSS-CULTURE MANAGEMENT
• Knowing how to access the impact of culture whether national culture
or instructional culture on performance.
• Managing a diverse workforce competently is considered as a means
of gaining competitive advantage.
• The ability to manage cross-cultural interactions, multinational teams
and global alliances has become fundamental to managing in today’s
globalized world.
How culture helps international
manager
• Cultural knowledge helps in adopting appropriate business protocols
in tune with local standards
• Cultural concepts helps to understand work culture in global
environment. This can hlp in improving organizational performance.
• Cultural understanding helps improve management tools and
techniques and understand perspective in various countries.
• Culture understanding can help in comprehending the diversity of
market and customers.
• Culture proficiency can help enhance one’s performance in
international negotiations, meetings, and in casual encounters.
SKILLS OF Effective international
manager
• Business and Technical skills: Includes product knowledge, operations,
logistics management, accounting and finance, strategic planning and
computer skills.
• Cross-cultural skills: Includes knowledge of different national cultures
and how they influence management, self-awareness, cultural
sensitivity and language skills.
• Experience: Includes managing negotiations, ability to handle
workforce challenges, ability to select suitable partners, handling
mergers, joint ventures issues, dealing with legal, political and ethical
challenges