Employees’ Cultural Values in Global Business

Abstract

Understanding the cultural values of employees is important in determining their behavioral patterns at the workplace. In this study, it has been discovered that an individual’s behavior is closely defined by his or her cultural background. The research has also revealed that people from different cultures embrace different values in diverse ways, even if they are exposed to the same environment for some time. When a firm is entering a new market, the management should give preference to host country residents and parent country nationals as opposed to third-country nationals when hiring employees.

Introduction

Culture is one of the most important factors that define the practices of employees within an organizational setting. According to Clardy (2007), Hofstede’s cultural dimensions theory critically analyzes the impact that cultural practices have on its people within the context of a workplace. This theory has widely been used to explain the cultural impact on employees who work in organizations located away from their home countries.

Culture will closely define one’s behavior, and the behavior will be reflected in the manner in which an employee treats his or her fellow workers, and also the way an employee takes instructions. Developing an organizational culture requires a system where employees are willing to acquire a common culture that may be slightly different from a culture that one was originally used to. In this study, the researchers sought to explore cultural values and the way they affect individual employees and the entire organization’s output. The researchers appreciate that there are contradictions that may arise when trying to develop a common pattern on the impact of culture on employee behavior because of some exceptional cases where one is not largely affected by his or her culture.

Individual Cultural Values

Group Dynamics

Hofstede’s Cultural Dimensions The United States Only Different Nationality Lived Abroad Traveled Abroad
Christina Bosworth Benjamin Carter James Crain Sock Ngee Goh
Power Distance Low (1) High (4) Moderate (3) High (5)
Individualism High (5) Low (2) Moderate (3) Moderate (3)
Masculinity Low (2) Moderate (3) Moderate (3) Low (1)
Uncertainty Avoidance High (4) High (4) Low (1 or 2) High (4)

The results shown in the table above demonstrate that the four group members have different cross-cultural backgrounds. One of the group members has never left the United States. This means that she has a low power distance, but very high on individualism. Another group member has a different nationality, which means that he moved to the United States from a different country. This gives him a high power distance but low individualism. The third student has lived abroad for a very long time, giving him moderate power distance and high individualism. The fourth member of the group has traveled a lot, giving him a high power distance and moderate individualism. The results show inconsistency among the group members in terms of their life experience and cultural practices. Based on this fact, it is important to have a power dynamic within Singapore Technologies Engineering that will suit the needs of all these employees.

Collective thoughts

The extent to which the derived ratings are consistent with each other

As mentioned above, the derived ratings from the group are not consistent with each other except for a few cases. Boys shared their ratings on masculinity, and their ratings were different from those of the girls. A certain level of consistency was also noted among three of the four members. The four members shared the fact that they have spent much of their time within the United States.

They all preferred to avoid uncertainty, positing a rating of 4 when it comes to avoidance of uncertain events. The other member whose results showed that he did not fear uncertain events had spent much of his life abroad. This clearly shows that he had learned a culture that was different from that practiced by the other three members of her group. However, the other two ratings showed no common pattern. The issues about power distance and individualism were largely influenced by the travel pattern of the members. Individuals who have traveled a lot and interacted with different people scored high on power distance, but low on individualism. They preferred collectivism when addressing different tasks. On the other hand, those who had not traveled a lot scored high on individualism, but low on power distance.

What cross-cultural differences suggest about the management of people across international boundaries

The cross-cultural differences witnessed in the above results clearly demonstrate that there must be a clear pattern of managing people across international boundaries. According to Hofstede (2004), the world has been turned into a global village with an advanced system of communication and transport sectors. This means that it is common for an organization to have employees with different cultural backgrounds.

As suggested in the analysis above, people from different cultural backgrounds view different issues in the workplace from different perspectives. One group may value individualism in their work, while the other group may value collectivism. When managing these people, it would be important to maintain flexible approach that would help accommodate different views. The management must be ready to accommodate these views, and bring them together in a common organizational culture for the sake of harmony within a firm. All these varying cultures should be embraced, and those that are desirable should be emphasized on, while those that are considered retrogressive should be discarded in a systematic manner. Through this, there will be a common culture in the organization derived from the best cultural practices by different members of the organization.

Type of leadership and management style preferred by cross-cultural employees

According to Ivancevich and Konopaske (2013), when working with people living across international boundaries, it is important to appreciate that they will behave differently based on their cultural backgrounds. In order to bring them together in a common organization, it will be important to have an appropriate leadership style that will be able to accommodate the varying opinions. The leadership style should be that which is sensitive to the fact that people from different cultural settings may have varying opinions on various organizational issues. Transformational leadership style may be important in such cases, especially in influencing employees to embrace a common culture within an organization.

Cross-cultural employees would want a management structure that listens to them, and is able to address their issues in the context of their cultural backgrounds. Transformational leadership style will be appropriate in making the employees to remain tolerant to other behavioral pattern. It will also motivate a culture where employees are willing to discard their practices that seem retrogressive among other practices, and embrace cultural behavior considered superior in achieving better performance for the organization. The management system should have an open communication system where all the employees can easily interact with their superiors in order to eliminate misunderstanding, occurred because of cultural differences.

Selection of an appropriate country

The researchers chose Singapore as appropriate country to focus on in this study. The decision to choose this country was guided by the choice of Singapore Technologies Engineering as the company for analysis. This company is headquartered in Singapore but has branches in several other countries around the world. It specializes in the production of aerospace products, electronics, marine sector, and land systems. With revenue of $ 5.5 billion registered in the year 2007, $ 10 billion market capitalization, over 100 subsidiaries, and more than 18,000 workers in 35 cities across 21 countries, this was an ideal firm to conduct a research on. This defined the choice of Singapore as the country of choice for the study.

Challenges and obstacles expected in the country selected

Singapore was the country identified to be appropriate to operate the chosen multinational corporation. However, some challenges are expected in this country that may have some impact on the ability of this corporation to achieve the desired result. One of the challenges that are expected in this country is the problem of small population. The country is home for only five million people. This means that there will be limited workforce for this multinational company. A few people who will be willing to work in the country will demand higher remunerations, and this may affect the profitability of the firm.

Cultural differences that exist in this country may also affect the normal operation of this firm. Although the country has remained highly cosmopolitan, there is a clear difference in the behavioral pattern among the Chinese, Malays, the Europeans, and other cultural groups living in this country. This difference may be reflected at workplace, making it difficult to integrate the employees into a single unit with a similar behavioral pattern. Another possible obstacle that may be experienced in this country is the language barrier.

There are four major languages used in this country which include English, Mandarin, Malay, and Tamil. Although English is a common business language in the country, a section of the society, especially immigrant from China and other neighboring countries do not know how to speak English. This may pose serious challenges if they are to form part of the employees in this firm.

Choosing of the right employees

Choosing the right employees to work in the organization is an important human resource management function that should be conducted with keenness in order to achieve the desired results. The primary management structure in our Singapore Company will be based on semi-autonomous groups. Each group will have their structure and clearly defined golas. Given the semi-autonomous nature of the company, the management unit at Singapore will be given an opportunity to make independent decision about the employees that can meet their local demands. However, it is highly recommended that the third country nationals (TCNs) should be avoided when hiring the employees.

The right composition of the employees will be a mix of host country nationals (HCNs) and parent country nationals (PCNs). The host country nationals will play an important role in ensuring that the firm will not struggle for understanding the local culture. They already know the local culture, and therefore, have the capacity to ensure that the organization does not derail from the expectation of its stakeholders in the local market. They will guide the foreign employees on what the local community expects from them. This way, it will be easy to make an entry into the market without any problem.

Another important group of employees will be the parent country nationals. This group of employees understands the organizational culture of this firm. They have been with the firm for a long time, and therefore, understand its management systems. They understand the policies of this firm that has yielded it success over the years. They have the capacity to train new employees that will be hired on the best practices that this firm has maintained over the years.

When allowed to interact with the new employees, they can help make them understand the vision of the firm in a practical context. Third country nationals may have minimal value in this new market, making them undesirable group for this new division in Singapore. Both HCNs and PCNs should occupy different management levels. Both groups should be at the top management unit and mid-management levels to ensure that there is an effective integration. The junior employees can be dominated by the host country nationals as a way of reducing cost of labor.

Summary of sources supporting the position taken

The relevance of host country nationals and parent country nations for a new division in a new country is largely supported by several scholars. According to the research by Oltra, Bonache and Brewster (2013), employing host country national is very important for an organization entering a new market. These employees already understand the local culture. When they are hired, they will play an important role in guiding the firm in this new market. The same view is shared by Yaping (2003) who says that HCNs are very important because they reduce the need to train employees to understand the local forces. They are also less costly as compared to the PCNs and TCNs.

According to the research by Gowan and Ochoa (2008), PCNs play an important role in maintaining continuity of the organizational culture. They are responsible for transferring the culture from the parent firm to the new firm. They also understand the values that the firm cherishes in its operation. It can easily pass this knowledge to the employees. This argument is supported by Toh and DeNisi (2007) who say that the PCNs may help the management to maintain their best practices that has been successful in the parent firm.

Conclusion

It is clear from the discussion above that cultural values play a pivotal role in defining the behavioral pattern within an organization. The cultural background of an individual employee and personal experiences will determine his or her way of interacting with other employees. Some employees may prefer individualism while others may prefer collectivism at workplace based on their cultural backgrounds. When planning to make an entry into a new market, it may be necessary to use parent country nationals and host country nationals as the main employees.

References

Clardy, A. (2007). Strategy, core competencies and human resource development. New York: Human Resource Development Internationa. Web.

Gowan, M. & Ochoa, C. (2008). Parent-Country National Selection For The Maquiladora Industry In Mexico: Results Of A Pilot Study. Journal of Managerial Issues, 10(1), 103-118. Web.

Hofstede, G. (2004). Exploring culture: exercises, stories, and synthetic cultures. New York: Yarmouth Intercultural Press. Web.

Ivancevich, J., & Konopaske, R. (2013). Human Resource Management. New York: McGraw-Hill Irwin. Web.

Oltra, V., Bonache, J. & Brewster, C. (2013). A New Framework for Understanding Inequalities Between Expatriates and Host Country Nationals. Journal of Business Ethics, 115(2), 291-310. Web.

Toh, M. & DeNisi, A. (2007). Host Country Nationals as Socializing Agents: A Social Identity Approach. Journal of Organizational Behavior, 28(3), 281-301. Web.

Yaping, G. (2003). Subsidiary Staffing in Multinational Enterprises: Agency, Resources, and Performance. The Academy of Management Journal, 46(6), 728-739. Web.