Summary Terence Jackson "International HRM, a cross cultural approach"
Part a. Introduction + chapter 1 & 2
1. The cross-cultural organization: the multicultural model
Case: IKEA
Typical Sweden:
 Love of nature
 Individualism through self-development
 Equality
IKEA is selling its ‘Swedishness’. They are really trying to ‘ reproduce’ their specific identity in
another culture. This is relatively easy in the Netherlands but difficult in Germany and France.
Culture is transferred by discussion and explanation and not so much by training or rules and
regulations.
The multicultural model
Value systems of national cultures, represented by four dimensions
1. Power distance (the extent to which inequalities among people are seen as normal)
Scale: 11 - 104 -->
Sweden: 31 Spain: 57 (West)Germany 35 USA: 40 France 68
2. Uncertainty avoidance (a preference for structured situations versus unstructured situations)
Scale 8 – 112 -->
Sweden: 29 Spain: 86 (West)Germany 65 USA: 46 France 86
3. Individualism (this looks whether individuals are used to acting as individuals or as part of
cohesive groups)
Scale 6 – 91 -->
Sweden: 71 Spain: 42 (West)Germany 67 USA: 91 France 43
4. Masculinity (distinction between ‘hard values’ such as assertiveness and competition and the
soft or ‘feminine’ values of personal relations, quality of life and caring (Sweden scores minimal
(feminine), Spain scores average)
Scale 5 – 95 -->
Sweden: 5 Spain: 42 (West)Germany 66 USA: 62 France 43
The main cultural dimensions
Hofstede 1980 …
 Power distance (participative management doesn’t have universal currency)
 Individualism (MBO is less strong in Spain)
 Masculinity and work centrality (Results focused HRM isn’t that effective in feminine cultures)
 Uncertainty avoidance (moving away of control and regulation in Western HRM is creating new
uncertainty
Trompenaars …
 Universalism vs particularism (nepotism is negative from a Western perspective but it is
sometimes needed in a particularistic culture
 Ascription (prior factor (education, family) or achievement factors)
 Locus of control (fatalism vs control; the extent to which planning is effective)
Hofstede 1991 …
 Long-term orientation (western, American targets are often short-term but in other countries
often prevail long term relationships)
Schwartz …
 Egalitarian commitment (extent to which employee welfare is sees as a right and obligation or
as a voluntary commitment)
Two questions
 What are the consequences for the HR-management of IKEA, working in Spain?
 How could IKEA have better adapted itself to the expectations of its local management and
workforce in the US?
2. The strategic Organization: the supranational model
Two basic approaches to an international organization:
1. To see it as a set of relationships between national units; each of which exists within its
national culture. People have different cultural values and the organization will also work within
the local conditions (legal, economic, social en political) of the host country. In this view, the
headquarters organization in the home country will have to adapt its HRM-practices to the
circumstances in the host country. This will lead to a differentiation of practices among the
subsidiary countries, and between the headquarters and the subsidiaries (affiliates)
2. The international organization will have a set of objectives, which can be achieved only by
integrating the various geographical functions. Hence an overall strategy will have to be formulated
in order to achieve objectives.
The first chapter was about differentiation by culture, this second chapter is about integration
across cultures or nations.
Case: Credit Lyonnais
Finance is more or less the same, all over the world, given local differences in legislation.
But French culture is specific …
 Catholic country (distrust in business world; attachment to rural community)
 Honour system vs contract system in US and consensus system in Holland
 State is important; positive role in society and economy
 Elitist system of schools and related ‘old boy networks’
Workers’ attitude to their organizations has been largely instrumental: they consider work as a
necessity and have a low involvement in the well-being of the company.
 Authority is vested in the role not the person and this is how a French manager gets things done
 Work is done in isolation; punctuated by formal meeting, excluding the need for personal
involvement
 Segregation and partitioning is not just hierarchical but also horizontal
One of the key aspects of the strategic management of modern organizations is the balance
between differentiation and integration. While flexibility is required in the way business is
conducted differently in different locations, there is a need to integrate activity and coordinate not
only business activity, but the way people are developed and deployed within the international
organization. Generally the more complex an operating environment the more differentiation is
required.
Bartlett and Ghoshal’s model
Four types of international operating organizations
1. Multinational. Responds to the nee to exploit national diversity and recognizes that a lot of
aspects (taste) is based on local conditions and national culture. Strong national presence and
responsiveness to national diversity. Decentralized and national self-sufficient.
2. Global. Here the organization exploits the costs advantages of centralized globalscale
operations based on knowledge development that is retained at the centre, and on the
implementation of the parent company’s strategies.
3. International. Here, the organization exploits the parent company’s knowledge and adapts it
worldwide. Sources of core competence are centralized, but other competences may be
decentralized. The role of overseas operations is to adapt the parent company’s competences
tot the local environment.
4. Transnational. The ideal type (recently known as glocal). Integration of the separate forces
operating in the international marketplace, which each of the three organizational described
above addresses only partially. These three forces are:
a. Global integration (especially tastes)
b. Local differentiation (national tastes; protectionism)
c. Worldwide innovation
Schuler, Dowling and Cieri propose that there are two major multinational enterprise components
that impact on strategic international HRM issues:
 the inter-unit linkages (involves the organization’s mechanisms for managing the differentiation
and integration of its operating units)
 internal operations (involves the need for each operating unit, e.g. subsidiary, to function
effectively within its own environment.
These issues impact on strategic international functions, that is, the way human resources are
managed:
 the resources put into its managing of functions,
 the location of HR-function
 the balance between centralized and decentralized functions
Important variables for the extent to which the need for internal consistency (integration) across
national borders contends with forces for local isomorphism (differentiation):
1. Local Embeddedness:
 Method of founding (Greenfield investment vs acquisition)
 Age of subsidiary
 Size of subsidiary
 Local resources dependency
 Level of Unionisation
 Local regulatory and other pressures
2. Parent company characteristics
 Parent country culture
 International experience of the parent
 Level of control-orientation of the parent
3. Flows between parent company and subsidiary
 Presence of expatriates
 Dependence on the parent
 Communication with the parent
4. Nature of the business
Two basic questions:
a. What kind of companies are the most centralized in their policies (e.g. HRM)?
i. Home country
ii. Products – services
iii. Role of R&D
b. What are similarities and differences between the French and the American business culture