11-1-2 Cultural Issues and Differences

Mexico, Poland, and the United States are about 46.7 percent, 56.5 percent, and 69.9 percent respectively.2

The nature of work engaged in also varies considerably in countries throughout the world. For instance, only 1.3 percent and 1.5 percent of the civilian workforces in the United Kingdom and the United States, respectively, work in the agriculture, forestry, and fishing sector of the economy, while 14.1 percent of the labor force is employed in this sector in Mexico and 15.8 percent of the population in this sector in Poland. International trade rules and treaties, such as NAFTA, that have an impact on agricultural trade barriers and subsidies, can strongly influence the growth or decline of employment in this sector. In fact, the percent of Mexican workers employed in the agricultural sector has declined fairly considerably since the ratification of NAFTA.

Statistics also reflect how immigration rules and the ability of foreign born individuals to work in a given country vary widely throughout the world. For example, in Australia 25.7 percent of the labor force is foreign-born, but in Japan this figure is less than 1 percent. Selfemployment and entrepreneurship also varies widely; 36.3 percent of workers in Greece are self-employed versus only 8.5 percent in Norway. Norms also differ widely regarding the prevalence of part-time versus full-time employment. In the Netherlands, 36.1 percent of the workforce works on a part-time basis as opposed to only 3.5 percent in the Czech Republic.

Finally, although the global economic recession that began in 2008 increased unemployment rates throughout the world, some countries have faced persistently higher rates of unemployment than others. For example, unemployment rates in Eastern European countries like Poland and the Slovak Republic have consistently been in the 15 percent range, with unemployment rates for young workers in those countries (age 24 and under) in the 20 percent range. These unemployment rates have been more than twice those in European countries like Denmark and the Netherlands.3

What does all of the above mean in terms of global strategic human resource management planning? Perhaps a lot. A business in need of a very plentiful available labor supply of young workers, for example, might find Poland a great place to open an operation. If it is looking for a location where workers are interested in part-time employment, though, the Netherlands (with a 36.1 percent part-time employment rate) might be a far better place than Poland (10.1 percent part-time employment rate) and certainly better than the Czech Republic (only a 3.5 percent part-time employment rate). Global human resource statistics give us a helpful clue into establishing and running operations in various countries, as well as into given national cultures.

As we saw in our discussion above, considerable cultural differences exist among countries, differences that have a profound impact on the practices of international human resources management. For example, in certain Asian and other countries the general expectation is that women will not be full-time participants in the workforce, while in certain Scandinavian countries, the exact opposite is true. In some countries, certain jobs are highly respected and remunerated while in other countries this is not the case; for example, medical doctors hold very high status in the United States, but a much more moderate status in Russia. In some countries, a large premium is put on long-term employment relationships, while in other countries much shorter-term relationships are expected.

In a classic study of national culture, Dutch social scientist Geert Hofstede identified five major dimensions of national culture as they apply to work throughout the world.4

Exhibit 11.1 Hofstede’s five WoRk-Related values in national CultuRe

Individual/ Collectivism

Power Distance National Culture Long-Term/ Short-Term Orientation

Source: Hofstede, 1984. Uncertainty Avoidance Masculinity/ Femininity

They are power distance, uncertainty avoidance, individualism/collectivism, masculinity/ femininity, and long-term/short-term orientation (see Exhibit 11.1). Let’s discuss them one by one.

11-1-2a Power Distance This dimension deals with the degree of equality of authority distribution in a given society and its workplaces and employee expectations related to the same. In countries with more egalitarian (low power distance) cultures, employees may address their bosses by their first names, and efforts may be made to eliminate very overt workplace hierarchical differences, such as special parking spaces reserved for senior managers. In low power distance countries, such as Denmark and the Netherlands, it is also common for workplace employee committees or other mechanisms to be established that give employees some direct input into the management of the organization. In contrast, workplaces in high power distance countries like Mexico, Japan, and Russia tend to have more centralized, hierarchical, and perhaps even autocratic workplace decision-making structures. Relationships between bosses and subordinates are likely to also be more formal in such situations.

11-1-2b Uncertainty Avoidance This dimension relates to a culture’s desire for predictability or the lack of the same in the workplace and otherwise. In countries like Germany and Austria, that rank high on uncertainty avoidance, people want clear rules, procedures, and structures. They value orderliness and predictability—“free spirit” employees may have a hard time fitting in. Countries with low uncertainty avoidance scores like Jamaica have a more “hang loose,” live-and-let-live attitude about things. For example, an employer in Germany is more likely to take very seriously an employee’s being late to work than an employer in Jamaica.

11-1-2c Individualism/Collectivism This dimension relates to the extent that people think of themselves as members of a group or collective, as opposed to as discrete individuals. For example, in highly individualistic cultures like that of the United States, employees tend to be evaluated and rewarded in great measure for their individual achievements and performances. People are expected “to make it on their own,” and society puts a high value on individual success. By contrast, many Asian countries like South Korea, Japan, and Taiwan rank high on collectivism. In these countries people tend to think of themselves as part of a group or collective and measure their success by the success of the group. In such countries it may be more common for workers to be paid based on the performance of their work team