Globalization and the Culture IHRM .pptx

International Human resource Management

1. Culture and societies How cultural and social environments impact on international business

2. Summary of contents What is culture? National culture Languages Religions Culture theories Organizational culture Changing societies Migration Urbanization Changing populations Challenges and responsibilities Conclusions

3. What is culture? Culture – A shared way of life of a group of socially interacting people A cohesive social group Can be a whole society or a smaller group How do we view other cultures? Ethnocentrism – relating to the world only in terms of our own culture Polycentrism – openness and understanding of other cultures

4. Facets of culture

5. Are cultures converging? Cultural convergence – a growing cosmopolitan culture and lifestyle, perceived as an aspect of globalization Persisting divergence – national differences persist despite globalization Cultural learning leads to ‘ crossvergence ’, or gradual process of cultural integration

6. National culture National culture – the distinctive values and norms which distinguish one nation from another Nation-state – administrative and territorial unit into which the world’s peoples are divided Most states contain multiple cultural and national identities - Can lead to social tensions between majority and minority groups Subcultures distinguish minority groups Discrimination against minority groups has a long history

7. Languages Language is the basic means of communication, which facilitates social interaction Low-context culture – clear and direct communication High-context culture – communication relies heavily on relationships and behaviour Majority and minority languages exist in most states, due to immigration and colonization (where indigenous cultures already existed) The linguistic family of Chinese is spoken by the largest number of people globally

8. Religions Religion provides a set of personal beliefs, and it can be a significant unifying force among people Freedom to practise religion is a human right , recognized in international law – The International Covenant of Civil and Political Rights (ICCPR) Most governments have ratified the ICCPR, but restrictions exist in practice

9. The world’s religions Religions may be monotheistic (belief in one god) or polytheistic (belief in multiple gods) Some religions are proselytising, that is, deliberately aiming to expand numbers and make new converts The world’s major religions are organized, with adherents around the globe, but there exist many indigenous, local religions which are less formal, based on traditional practices

10. Leading religions Christianity Islam Asian religions Buddhism Hinduism Confucianism 16% of the world’s population (over a billion people) are not adherents of any of the main religions, although they might observe some religious practices

11. Culture theories: Hofstede Hofstede’s cultural dimensions – based on national cultures 5 cultural dimensions: Power distance – To what extent do people accept unequal power structure? Uncertainty avoidance – How do people cope with life’s uncertainties? Individualism – Do people see themselves as independent or members of a group (collectivist) Masculinity – Are people inclined towards aggressive behaviour, or more caring (feminine)? Long-term or short-term orientation

12. Hofstede’s cultural dimensions Hofstede’s research is now dated, although cultural dimensions are a helpful classification He highlighted correlations between groups of countries: High power distance and low individualism Low power distance and high individualism Theory risks classifying cultures as ‘either-or’, whereas cultures are likely to have elements of both

13. Trompenaars ’ theory of relationships 5 relationship orientations: Universalism vs particularism Individualism vs collectivism Neutral vs emotional Specific vs diffuse Achievement vs ascription Culture theories point to the fact that there is no one ‘best way’ of managing people, and adaption to cultural background is essential

14. Organizational culture Organizational or corporate culture – values, norms and management style of the organization Despite globalization, companies tend to reflect national culture of their home country MNEs encounter cultural diversity in internationalization: Acquisition of foreign subsidiaries Merger with another company Joint ventures MNEs can gain from having a unifying culture, but need also to recognize cultural diversity within the organization

15. MNE organizations and culture Bartlett and Ghoshal’s typology highlights localization and the role of corporate culture Four models of organization: Multinational model – decentralized International model – decentralized but with global strategic oversight Global model – highly centralized Transnational model – central control and local responsiveness

16. Changing managerial culture Contrast craftsman production with ‘Fordism’, which typifies the large factory producing standardized products in large volumes The worker in an assembly line has lost control over the overall process, repeating the same task over and over Fordism based on Taylor’s scientific management Outcomes: cheaper products for consumers but poor job satisfaction for workers

17. Taylorist scientific management theory

18. Changing societies: migration Migration is the movement of people from one place to another, due to: Push factors – escape from poverty, natural disasters, religious persecution Pull factors – prospect of work and economic betterment Migration can occur within a country or between countries Migrants form a substantial percentage of some populations Remittances sent by migrants back to families contribute to the economies of many developing countries, such as China and India

19. Urbanization Movement of people from rural to urban areas Associated with industrialization, but climate change is a factor in developing countries, especially in Africa Precarious agriculture that threatens rural livelihoods Desertification/flooding associated with climate change Urbanization in poor developing countries gives rise to concern over sustainability of development Issues of security, poor housing, unemployment, poor health provision

20. Changing populations Demographic change refers to changes in whole populations brought about by rises and falls in the birth rate and death rate, and migration The ageing society sees a rising proportion of older people Ageing has become a particular concern in developed countries Developing countries generally have younger populations, but also face issues of ageing populations in the future

21. Elements of human well-being

22. Challenges and responsibilities As global business and economic development reach more societies, MNEs must address impacts on societies Responsibilities of business for changes taking place in societies: employment, urbanization, the use of migrant workers Governments and business alike bear responsibilities to serve human needs in sustainable ways

23. Conclusions Cultural values are shaped in social contexts, encompassing language, religion and sense of belonging Theories of culture identify cultural dimensions based on national cultures, which remain divergent despite globalization MNE supply chains encompass ever more countries, bringing economic gains but also greater urgency to considerations of impacts in societies.