HR Policies in International Business

IHRMWeek 2

How HR can help MNC’s meet their strategic objectives

• Make top management understand the cultural diversity in the workforce

• Advice on how the company can coordinate functions across these various cultures

• Ensure managers and employees have good cross cultural skills

• Create MDP and career paths that include overseas assignments

• Make all employees understand how IHRM can help the company achieve its goals

Functions of IHRM

• International relocation• Orientation• Training and development • Performance appraisals • Government relations• Cultural background• Taxation• Compensation issues

(C) Dr. Pavithra kailasapathy

Strategies in IHRM

• Integration• Differentiation

(C) Dr. Pavithra kailasapathy

What is culture?

The collective programming of the mind which distinguishes one group or category of people from another (Hofstede)

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How do you identify culture?

• Behaviour• Symbols• Beliefs• Attitudes• Appearance • Communication

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Levels of culture

• Group• Society• Country• Region• Organisation

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Hofstede’s cultural dimensions

• Individualism: The extent to which society emphasises the importance of the individual vs the group

• Uncertainty avoidance: the degree to which a society considers itself threatened by uncertain events and ambiguous situations and tends to avoid these types of situations or tries to control them through formal means

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Hofstede’s cultural dimensions

• Power distance: the degree to which power is distributed in a society/organisation

• Masculinity: the extent to which the society values masculine characteristics and not caring for others. Also, the extent to which male and female roles are clearly defined

• Long-term: either focus on the future or more focus on the present

Sri Lankan culture

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Cultural differences – Appearance USA China Japan

•Business suit and tie are appropriate in all major cities

•Wear dark colored business suits (gray and navy)

•Women should wear a suit or dress with jacket in major cities

•Wearing classic clothing and classic colors (navy, gray, ivory, and white) will ensure you give a confident and conservative appearance

•Conservative suits for men with subtle colors are the norm

•Women should avoid high heels and short sleeved blouses. The Chinese frown on women who display too much.

•Subtle, neutral colors should be worn by both men and women

•Business suits are most suitable.

• Casual dress is never appropriate in a business setting.• Shoes should be easy to remove. Slip-ons are the best choice•Women’s dress should be conservative. Little accessories. •Women should not wear pants in a business situation. Japanese men tend to find it offensive.• Women should only wear low-heeled shoes to avoid towering over men.

Cultural differences – behaviour USA China Japan

•Business conversation may take place during meals (breakfast meetings, luncheon meetings, or dinner meetings) • Gift giving is discouraged or limited by many US companies. A gracious written note is always appropriate and acceptable.•If you are someplace with a line or queue, go to the end and wait your turn.•Do not use or chew on a toothpick in public.

•Do not discuss business at meals.•As a cultural courtesy, you should taste all the dishes you are offered•Women do not usually drink at meals.• Tipping is considered insulting•Do not use large hand movements. •Personal contact must be avoided at all cost•Do not point when speaking. • Gift giving is a very delicate issue in China

•Drinking is an important part of Japanese culture. • Never pour a drink yourself; always allow someone else to do it for you.• Most business entertaining is done in restaurants or bars after business hours.•Japanese rarely entertain in the home. • If you are invited to a social event,. It is the custom to be "fashionably late.”•Gift giving is very important both business and personal gifts

Cultural differences – Communication USA China Japan

• Offer a firm handshake, lasting 3-5 seconds, upon greeting and leaving

•Good eye contact during business and social conversations shows interest, sincerity and confidence

•Introductions include one's title if appropriate, or Mr., Ms, Mrs. and the full name

•Business cards are generally exchanged during introductions. However, they may be exchanged when one party is leaving.

•Bowing or nodding is the common greeting; however, you may be offered a handshake. Wait for the Chinese to offer their hand first.• Applause is common when greeting a crowd; the same is expected in return.• Often times Chinese will use a nickname to assist Westerners.• Being on time is vital in China. • Appointments are a must for business. • The decision making process is slow. • Allow the Chinese to leave a meeting first.

•Take special care in handling cards that are given to you•In a business situation, business cannot begin until the card exchange process is complete.• The customary greeting is the bow.•Understand that the Japanese prefer not to use the word no. If you ask a question they may simply respond with a yes but clearly mean no. Understanding this is critical in the negotiation process.

Why do we need to know about culture?

• How we work• How others work• Attitudes• Behaviours• Negotiation• Do’s and don'ts

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Culture shock

“Culture shock is a psychological disorientation caused by misunderstanding or not understanding the cues from another culture. It arises from such things as lack of knowledge, limited prior experience, and personal rigidity.”

---W.J. Redden

Culture shock

• Symptoms– Homesickness– Hostility and Anger– Alcohol and Drug Abuse– Anxiety– Depression