Introduction
As companies expand into different global and regional markets, this results in a diversified employee demographic creating a company’s transition from a mono-cultural entity into a multicultural enterprise. Such a change is brought about by the necessity of hiring local talent in a new market to expand the company’s operations as well as to better understand the quirks and cultural norms in certain ethnic and racial communities (Mallol et al. 2007). Without such a transition in place, a company runs the risk of lackluster market penetration brought about through ill-conceived marketing and sales initiatives that fail to understand the nuances inherent in the new market that the company is expanding into. Thus, the concept of racial and cultural diversity has become the norm in present-day globalized operations. Evidence of this can be seen in the data by Hofhuis et al. (2012) which showed that only 19 percent of present-day company’s had not integrated cultural diversity practices into their HR talent management programs. However, even though cultural diversity is the norm in today’s competitive landscape, this does not mean that there are no divergences when it comes to the talent management practices utilized by HR departments when it comes to dealing with a diversified workforce (Cartledge et al. 2008, 33). Mono-cultural talent management (also known as homogenous talent management – single culture) differs significantly from its multicultural counterpart (heterogeneous talent management – more than one culture) when it comes to organizational culture, local business practices, cultural norms, and other similar facets that multicultural talent management needs to take into consideration (Hofhuis et al. 2012, 985). It is based on these differences that this literature review will utilize the three approaches to managing cultural diversity that was developed by Adler. Consisting of parochial, ethnocentric, and synergistic organizations, these approaches were stated by Cartledge et al. (2008) as being some of the most widely used strategies when it came to managing cultural diversity in the workplace. By observing each strategy and utilizing them as the basis behind examining the challenges in talent management in multi-cultural organizations, this study will be able to argue the pros and cons behind their implementation based on each challenge that will be revealed. By critically examining the application of each method, this literature will be able to reveal the adaptability of each type of strategy and how it would work in present-day work environments. The reasoning behind this critical examination would be to determine which strategy would be most effective when it comes to addressing the challenges in managing talent management in culturally diverse organizations.
The outcome of the literature review will be supported by a methodological approach that will examine the opinions of HR managers in various companies to understand how they address the challenges in their multi-cultural organizations and whether such methods will mirror the assumptions that will be developed at the end of the literature review. The next sections will detail these studies’ views on talent and talent management, cultural diversity, and the methods of managing cultural diversity that will act as the framework for analyses in examining the challenges in talent management in culturally diverse organizations. It will define the individual approaches and provide examples of their application in present-day business environments.
Defining Talent and Talent Management
Who is a Talent?
One of the current general definitions surrounding the concept of talent when it comes to job roles in a company is that it is an individual that has the necessary aptitude and skills that fulfills the requirements of a job within a company (Robles 2014, 63). Division of talents in most cases is done under the categories of skilled and unskilled labor and in some cases as blue and white-collar jobs. Since particular jobs require a special set of skills and expertise, it is necessary to match a person with those sets of skills with a type of job that would make the best use of them (Robles 2014, 64). For instance, a person that has extensive experience in programming is suited for a job in software development and is unlikely to be proficient in a job that involves the incorporation of Six Sigma principles into a corporation’s operational infrastructure.
It is based on this that talents are considered as resources that are made up of the following traits: individual aptitude, experience, and expertise in a particular skill set or profession. The presence of such factors and their general amount (i.e. how many years experience a person has or their level of education whether in the form of a Masters’s or Doctorate) supposedly impacts the output that an employee produces (Robles 2014). Thus, it is assumed that the more aptitude, experience, and expertise a talent has, the greater their supposed contribution to the company.
Talent: Individual or Acquired Skills?
One of the current arguments in defining talent within the context of job roles within a company is whether talent is embodied by an individual or their capability in doing a job as defined by their acquired skills. When referring to the argument of talent as embodied by an individual, Hedricks et al. (2008) state that this focuses on perceived capabilities based on the individual in question. For instance, one of the most widely believed assumptions in today’s competitive employment markets is that graduates from Ivy League schools (ex: Harvard, Brown, etc.) or well recognized technical institutions (ex: M.I.T) are talented and, as such, bring more to the company when it comes to their capabilities. This is one of the reasons why such schools charge a premium for their tuition fees since merely graduating from there creates a certain level of distinction that people associate with talent (Hedricks et al. 2008, 339). As such, even though a potential employee may or may not necessarily be the best for a particular job, they are hired nonetheless based on their perceived talent since they graduated from a top university.
On the other end of the spectrum, researchers such as Kapoor & Sherif (2012) argue that talents are defined by their acquired skills and not necessarily by what they embody (ex: people from top universities supposedly being the embodiment of top talent). It is from the perspective of Kapoor & Sherif that talents can be developed from within the company through training, experience, and guidance which results in an individual that is capable of doing a particular job
(Kapoor & Sherif 2012, 235). Kapoor & Sherif argues that it is the role of HR departments to continue to train employees throughout their time in the company so that they can be prepared to take on more responsibilities and leadership roles based on the perceived needs of the company (Kapoor & Sherif 2012, 235). Thus, under this perspective, talents are not embodied by the individual but by the skills, experience, and knowledge they are given which results in an employee being able to contribute towards the operations of a company.
Both points of view do have valid arguments; however, some issues first need to be taken into consideration before making a final judgment. For instance, the analyses of Julian Chun-Chung & Austin (2008) which examined the success rates of graduates from top Ivy League schools as compared to their non-Ivy League counterparts showed that, based on capability alone, many graduates from Ivy League schools did not possess the supposed “top tier” talent that was correlated to them. This is based on an examination of companies such as Enron, GE, Lehman Brothers, and other large corporations that focused on hiring employees from top-tier universities (Julian Chun-Chung & Austin 2008, 42). The results of the Julian Chun-Chung & Austin study showed that such individuals required the same amount of additional training and experience as compared to their non-Ivy League school counterparts and, as such, calls into question the validity of the concept of talent as defined by individuals since the study clearly showed they were not as talented as initially perceived (Julian Chun-Chung & Austin 2008, 39). However, the analyses of Clemmensen (2012) showed that the concept of talent as embodied by individuals does have merit when examining the cases of Bill Gates, Steve Jobs, Larry Ellison, Leonard Bosack, and dozens of others whose individual talents resulted in the creation of some of the largest corporations today (Clemmensen 2012, 154). When looking at the results of this analysis, it must be questioned whether the results of the Clemmensen (2012) study showcases the exception to the rule in the case of talent as embodied in individuals or is an ongoing trend in today’s corporate landscape and, if so, should corporations focus on individual “star” talents or develop their talents from within the company through training and experience?
It is due to these opposing viewpoints that the debate regarding talent as embodied by an individual or through acquired skills will be discussed in further detail in this literature review in the succeeding section on elite and egalitarian perspectives on talent management.
What is Talent Management?
The Origin of Talent Management
The origin of the term “talent management” can be traced to the latter half of the 1990s and was used to describe “the war for talents” that was characterized by numerous companies actively attempting to acquire talented individuals through their hiring practices, developing them from within their employee ranks, as well as by enticing them away from rival corporations (Shorter-Gooden 2013, 208). These companies operate under the belief that having better-talented individuals within all departments of the company as compared to their competitors is how they will outperform them. Galperin & Johns (1998) support this assertion by explaining that this phenomenon developed due to the consensus that top managerial talent supposedly helped to drive the success of an organization through more creative outlooks and more effective problem-solving skills. As such, companies invested a considerable amount of resources not only in acquiring talented employees to lead the company but also focused on developing and retaining the talented individuals that they already had (Galperin & Johns 1998, 3). It was due to the development of what can be described as the “talent mindset” that the belief arose that organizations were only as strong as their “star employees”. One manifestation of this practice that can be seen today is the absurdly high executive compensation packages that are used as a means of retaining “stars” within the company (Galperin & Johns 1998, 3).
This particular mindset led towards the development of two opposing viewpoints, elite and egalitarian when it came to talent management practices. These categories will be examined in the next section and will form the basis behind the future arguments that will be presented in this literature review.
Defining Talent Management
Companies do not operate within a vacuum and have to contend with a variety of factors that can impact their operational performance. Technical and workforce teams act as the backbone of every company where through their actions the methods of operation within a company continue unabated (Hofhuis et al. 2012, 985). It is under this perspective that the concept of talent management enters into the picture to address one fundamental aspect of company operations, namely the retention and development of talented employees to ensure continued operational efficacy within a company (Hofhuis et al. 2012, 985).
Talent management under the aforementioned situation can be defined as an integration of different subsets of HR practices which consist of: attracting talented employees, retaining these talented individuals, developing their skills to better contribute towards the company’s operational capacity, motivating them to ensure a certain level of performance and implementing an assortment of engagement strategies to better understand what can be done to improve current operations and employee welfare (Hofhuis et al. 2012, 988). It is the combination of these factors that is at the core of talent management operations within most companies.
Conflicting Perspectives on Talent Management: Elite or Egalitarian?
This section continues the earlier argument on talent as embodied by an individual or talent as defined through acquired skills. It focuses on the elite and egalitarian perspectives that buildup on the earlier points of view in the individual or acquired skills section of this literature review.
The elite point of view of talent management operates under the philosophy that companies should focus on employees that have high potential and high performance (Au & Marks 2012, 277). These “top performers” are subsequently singled out when it comes to the implementation of talent management practices and are rewarded disproportionately as compared to their peers. These individuals are often slated for placement into more senior positions within the company under the belief that their previous performance would translate into similar results under a new position with more authority and would enable the company to be more competitive (Au & Marks 2012, 288).
The egalitarian point of view on the other hand focuses more on a universal application of talent management wherein the focus is not on a small cadre of “star” employees; instead, the company would focus on practices that would impact employees as a whole (Miriam et al. 2013, 339). This would manifest in continuous development programs, performance-based incentives as defined by individual work performance as well as motivation strategies that focus on improving how employees view the work they do for the company (i.e. employee empowerment, leadership, etc.).
After examining both the elite and egalitarian perspectives, this literature review will argue that the elite perspective is overrated as compared to the supposed “superior outputs” generated by star employees.
Issues with “Elite” Talent Management
One of the main issues that this literature review has with the supposed superiority of elite talent management is that it correlates talent with success. The basis behind this paper’s assumption has its roots in the studies of Husting (1995), And & Colema (2006), and Miriam et al. (2013) who showed that there is there no guarantee that just because a person has been described as “talented” and is thus supposedly a valuable asset, that this would translate into superior performance within the company. In support of this assertion is the study of Lee (2009) who showed that “elite star employees” both within a company and those hired outside from outside of the company based on the perception that they are “prime talents” were unable to replicable their levels of performance once they were placed in senior management positions (Lee 2009, 37). Lee noted that the departments they were assigned to experienced lower levels of performance. What this shows is that elite talent management is not a one size fits all strategy since there is clear evidence showing that despite the fact someone is considered an “elite talent” this does not necessarily translate into better performance or results that would justify the promotions or worker compensation given to them (Lee 2009, 39). The Broome, DeTurk, Kristjansdottir, Kanata & Ganesan (2002) study which delved into the corporate headhunting practices and how they impact performance stated that the “star employees” that companies often used headhunting companies to acquire may not be the reason behind the success of companies; rather, it seemed more likely that it was the systems in place within the company itself as defined by all the employees within the company and their contribution to the operational process of the organization as a whole that may be the reason behind a corporation’s success (Broome et al. 2002, 239). Broome et al. pointed out that once an individual was “headhunted” the company they left did not suffer a significant decline in performance while the company they went into also did not experience a significant increase in performance. What occurred was that a position was vacated and another filled with little in the way of significant impact on operational processes (Broome et al. 2002, 242). This was in part due to the support system in place that enabled a company to continue to function regardless of sudden shifts in employee lineups. Further evidence of this section’s earlier assertion can be seen in the list below which detail the practice of high compensation and the continued hiring of “elite talent” despite severely negligent and outright poor performance:
Lou Pai (cost Enron hundreds of millions of dollars in losses due to negligent practices in entering new markets in the U.S. – left with a severance package of 275 million dollars) (Shorter-Gooden 2013, 208).
Steve Perkins (oil trader at PVM Oil Futures who bought 550 million dollars worth of oil on his computer while drunk resulting in a massive increase in global oil prices which created severe economic issues for multiple countries and cost PVM Oil Futures 5 million dollars in damages – was hired by Star Supply Renewable a short while later) (Shorter-Gooden 2013, 209).
James F. Gooch (former CEO of Radio Shack who was widely blamed for the 70 percent decline in the company’s stock due to largely ineffective and outdated strategies, left Radio Shack in 2012 – hired by Market Basket in 2014 as a new CEO) (Robles 2014, 60)
The management team of Albertsons Supermarket – CEO Larry Johnston, CTF Robert Dunst, EVP for marketing and food operations Paul Gannon, EVP John Sims, and CFO Felicia Thornton (all largely blamed for the collapse of the grocery store chain yet were still given millions of dollars in compensation packages when they left the company and were also subsequently hired as consultants and managers of other companies within the U.S.) (Shorter-Gooden 2013, 211).
The examples showcase a trend in hiring practices when it comes to talent wherein despite obvious issues with their performance, such individuals continue to be hired by other companies. If performance is what companies should be after, why do they continue to hire elite individuals whose performance and capacity to contribute to the company is in serious doubt?
The examples above are not exceptions to the current “elite” talent management system; rather, they show an endemic issue that continues to plague such a system. It is due to this that this literature review views the current assumption of the elite management perspective as highly flawed since it presents the assumption that the overall intelligence and capacity for improvement of an organization is based on the elite group of employees it has rather than the system of employees that exist within the corporation.
This paper argues that it is the supporting system (which is made up of all employees within the company) and not the “elite” employees that act as how a company can improve itself and have better operational processes. This point of view is supported by Hedricks et al. (2008) who state that those who advocate for elite talent management fail to take into consideration the effectiveness and use of systems. They are blinded by the belief of individual brilliance improving the company (ex: entering into new lines of business, implementing new processes, etc.) that they fail to realize that corporations work by a different set of rules as compared to what can be seen in society (Hedricks et al. 2008, 344). Corporations as a whole do not just create products or services; they also execute strategies, compete against rivals, and coordinate the efforts of different employees throughout their many departments (Hedricks et al. 2008, 345). As such, it is from the perspective of Hedricks et al. that companies that are the most successful in the aforementioned tasks are those where the system rather than the individual is the so-called “star”. Thus, Hedricks et al. stated that one of the most glaring problems in HR practices is the “talent myth” that assumes that it is the people that make an organization smarter when in reality it is usually the opposite that is true (Hedricks et al. 2008, 347). This literature review agrees with this point of view and it will be discussed in more detail in the next section of this paper.
Talent and thus Talent Management a Myth?
At this point, this literature review has argued that it is not the “star employees” that create success for a company; rather, it is the supporting system that ensures a company’s success. In the words of Cartledge et al. (2008), a company is not composed of what can be described as an “all-star team”; instead it can be described as an organization with multiple supporting players (i.e. employees) that ensure the company continues to become a success (Cartledge et al. 2008, 33). It is based on this that it must be questioned whether talent and as a result, talent management is a myth since it is the supporting system and not the employee that “creates a talent” (Cartledge et al. 2008, 35).
In this literature review, two sections have been devoted towards understanding the concept of talent, the “individual or acquired skills section” and the “elite management” section. They can be boiled down to the view that “talent” is a quality that is attached to certain individuals by who they are. Thus, those that are “talented” are considered as being “superior” to ordinary rank and file employees. However, based on what has been presented so far, it can be seen that talent is a set of attributes relating to aptitude, experience, and expertise; all of which are highly dependent on the organization they are a part of to gain rather than these aspects being an inherent aspect of an individual.
It is due to this that this paper argues that the concept of “talent as an individual” is a myth since it is not the individual that makes an organization great, as per the findings of this literature review; rather it is the organization that makes them great in the first place. However, does this mean that the concept of talent management is a myth?
From the point of view of this literature review, talent management can be considered as means of aligning employees with the interests of the company.
One aspect of talent management focuses on developing an employee’s skills throughout their history in a company to take on a variety of job roles since the value of an employee increases over time as they gain more experience and skills that they bring to their job. It is due to this that retaining such individuals becomes an integral aspect of talent management operations which transitions into the second aspect of talent management (i.e. employee retention).
With the company expending a significant amount of time and effort in building up an employee, it is obvious that the company would want a return on their investment in the form of competent performance over several years. This is one of the reasons why some HR personnel ask potential employees during the hiring process how long they believe the employee would stay with the company to reduce costs associated with training new employees that could just take the training they gained to a company’s rivals in the same industry (Julian Chun-Chung & Austin 2008, 43). Some manifestations of this practice come in the form of employee motivation and engagement strategies that HR departments utilize to increase the likelihood of an employee staying for a significant period (Julian Chun-Chung & Austin 2008, 44). The necessity behind such practices was explained by Julian Chun-Chung & Austin (2008) as not only correlating to employee retention but to their overall performance within the company as well.
What this shows is that talent management is a practice that aligns employees with the interests of the company under the perspective that it is the system; rather than the individual employees, that matters. As such, developing employees within the company to fulfill long-term goals, ensures an alignment of interests and better operational processes (Walker et al. 2005, 319). To protect these interests, talent management practices focus on aspects related to retention, motivation, and engagement to ensure that the organization as a whole operates based on a long-term plan of employee advancement based on need (Walker et al. 2005, 321). This showcases that talent management is not a myth since it is aligned with the organization-oriented practice that this literature review has emphasized.
The next section delves focuses on the egalitarian perspective and how it is aligned with the organization-oriented practice that this paper has so far emphasized.
Egalitarian Perspective on Talent Management
Based on the information that has been shown so far, it can be stated that companies are inherently dependent on their employees and showcases the need for implementing methods of managing and maintaining an adequately skilled workforce, a need which is filled by present-day Human Resources departments that are a ubiquitous aspect in many small, medium and large enterprises. It is the task of HR departments to properly match potential employees with tasks that they would be well suited for and this is where the concept of talent is applied in corporate operations.
As such, Hofhuis et al. (2012) state that under the egalitarian perspective, it is the collective capability of employees that enables an organization to be competitive in present-day markets. Hofhuis et al. go even further in this definition by stating that this collective capacity goes beyond individually talented employees; rather, it encompasses the capacity of the employee talent pool as a whole to respond to changes in the competitive environment as a whole, analyze market signals, and implement changes within the company as needed to respond to shifts in consumer demand (Hofhuis et al. 2012, 989).
From the egalitarian perspective, an employee can be considered as a form of investment due to the expense related to the time and training that go into each one. It should be noted though that improving and retaining talent within any company is an absolute necessity for any business to succeed in the present day competitive landscape due to how talented employees can be considered as drivers for increased performance and better operational processes within a company (Clemmensen 2012, 157).
It is based on all these factors that it can be seen that talent management is a necessary and integral aspect of HR operations due to how it can have far-reaching consequences when it comes to the capacity for a company to be competitive. The next section will focus on defining culture and its impact on corporate operations.
What is Culture?
This literature review has so far asserted that it is not the star employee but the system in place that supports them that creates good work outputs. After coming to this assertion it must then be questioned what this perspective means for multicultural talent management? How do you apply egalitarian practices when there are diverse cultures to take into consideration, each with its point of view? It is due to these questions that the next sections will delve into culture, organizational culture, and the practices that can be implemented to address the questions that have just been formulated.
The previous sections helped to define what is talent and talent management and how it applies to the operations of a company, this section will tackle the definition of culture and how it factors into the operational infrastructure of a company. Before proceeding, it is first necessary to define culture and how it applies to the behaviors of employees and its influence on the organizational culture of a company.
Defining Culture
Culture can be described as the different traditions and aspects related to historical behaviors that can be attributed to a particular group of individuals originating from a particular region. This also extends to aspects related to language, nationality, and event ethnicity (sometimes even religion in the case of the Jewish people) (Reilly 2015, 37). Based on the work of Reilly (2015) which examined the cultural attributes that defined particular nationalities and their impact on talent management within organizations, it was shown that culture, in essence, acts as a set of rules that influence the way people interact with one another and in turn impacts the development of a company’s organizational culture (Reilly 2015, 38). One clear example of this can be seen in Japan’s hierarchical cultural predisposition where a considerable emphasis is placed on respecting individuals that are older than you. This manifests in the cultural quirk of utilizing honorifics at the end of an individual’s last name (ex: Masumoto-san) to address them (Reilly 2015, 40).
When it comes to Japanese business culture this type of cultural quirk manifests in the use of terms such as “sempai” when referring to someone that has been in the company longer than a particular employee or “kouhai” when referring to a junior or someone that has been in the company for a shorter period. Aside from this, individualism within the culture of Japan is dampened in favor of collective action (Reilly 2015, 39). The impact of this type of social aspect on the organizational culture of Japanese companies is that seniority in a company is considered as being far more important as compared to individual capability. For instance, even though a younger employee in the company may have a valid idea during a meeting they are not allowed to contribute unless the idea is supported by a senior staff member (with the idea often being attributed to that senior staff member) and decision making is often done through collaboration rather than through empowered individual department leaders (Reilly 2015, 41). This differs significantly from the type of culture found in U.S.-based companies where a significant emphasis is placed on individual performance and the capacity for empowered leaders within the company to make decisions that can influence significant aspects of a company’s performance.
Issues with Culture
As explained by researchers such as Downs (2012), different cultures often result in different rules and perspectives on how particular matters should be resolved. This showcases the main challenge when it comes culturally diverse organizations due to the competing cultures and ideologies that are present resulting in problems when it comes to managing such a diverse group of individuals (Downs 2012, 42). Even though different employees work together in the same environment, they still maintain their own distinct cultural identities which impact how they view the motivating factors and engagement strategies utilized by HR departments (Downs 2012, 42).
For instance, workers within the U.S. are focused more on individual development and gains due to how the culture in the U.S. focuses more on individualism. As such, the use of extrinsic motivating strategies in the form of monetary rewards based on individual performance is a motivational strategy that ideally works for individuals that developed in such a culture. As explained by Cottrill (2012), that while extrinsic motivators are effective as a method of motivating and retaining employees, it is not a universally applicable strategy that can work on all cultural groups. Cottrill states that the example of companies in Denmark, France, and Germany that place a considerable emphasis on the concept of a “work-life balance” wherein employees value their time over higher salaries or monetary incentives shows how a primarily extrinsic based strategy cannot apply to all cultural norms (Cottrill 2012, 8). Intrinsic motivating factors are effective when the concept of a “reward” is in line with how much a worker is emotionally invested in the job that they are doing based on their positive experiences (Cottrill 2012, 8). This form of motivation focuses more on the emotions and feelings of contentment associated with a particular job with group camaraderie, inter-office socialization, and a feeling of “family” being prime examples of intrinsic motivating factors that some companies (such as those in Japan and Europe) foster which makes a person less inclined to leave the company due to such an experience. Such a strategy is often effective in cultures where there is a greater emphasis placed either on familial relations (seen in the case of many Asian cultures) (Ready & Conger 2007, 68).
As such, introducing an individual from an individualistic culture that places an emphasis on extrinsic motivation and putting them into a culture that emphasizes intrinsic motivation and a more integrated and active group dynamic will undoubtedly result in conflict. Studies such as those by Ready & Conger (2007) reveal that it is one of the reasons why ex-pats often find it difficult to integrate into the new organizational cultures that they find themselves in due to how the culture that they grew up in impacted their perception and how they worked (Ready & Conger 2007, 69).
Taking the factors that have been mentioned so far into consideration, it must then be questioned whether it is feasible to implement a talent management strategy in a diverse cultural organization that can be applied without any unforeseen issues.
This section has so far helped to clarify the concept of culture; however, it is necessary to now determine how culture is viewed as a resource under the methods of managing cultural diversity.
Viewing Talent Management under the Parochial, Ethnocentric, and Synergistic Context
The parochial and ethnocentric management strategies argue that companies should only view talent management based on aptitude, experience, and expertise wherein the focus of any hiring and employee development process should be on how best an individual would be able to fulfill a particular role. Such a viewpoint has a considerable amount of backing through the studies of Uren (2007), Clemmensen (2012), and Au & Marks (2012) who explain that the whole point of the hiring process is to ensure that an employee can fulfill the needs of the company based on the job that they were hired/developed for. The counter-argument to this claim by supporters of the synergistic strategy is that aside from the aforementioned factors, a company should also pursue the concept of culture (Miriam et al. 2013, 341). For instance, Miriam et al. (2013) argued that even if a company is operating within its home market, it should actively pursue culturally diverse hiring and development process that takes into account the culture of the individual hired (Miriam et al. 2013, 341). Culture, for proponents of the synergistic strategy, is considered as a valuable resource since it brings in fresh viewpoints, the possibility of new practices as well as the creation of methods of communication that may enable the company to develop itself into a better organization (Miriam et al. 2013, 341). The problem this research paper has with the viewpoint of the synergistic supporters is that the concept of culture as a “valuable resource” is that it cannot be quantified and thus its value is vague.
The table below helps to showcase the concept of a measurable resource based on employees and how it can be aligned with the goals of the company:
Table 1: Measuring Employees as Resource
What the table shows is that for something to be considered as a valuable resource, it must be specific and measurable as well as have defined means of being able to align with the goals of the company. Shorter-Gooden (2013) supports the assertion this paper makes regarding culture as a “vague resource” by stating that while numerous companies have implemented the synergistic management strategy to take advantage of the supposed benefits of a multicultural workforce, the inherent benefit of each use of cultural diversity is not measurable as compared to situations where it possibly could not have been applied (Shorter-Gooden 2013, 210). What Shorter-Gooden is stating is that since culture as a resource cannot be measured, it is uncertain whether the benefits attained are significant enough to warrant its application.
A counter-argument to this particular viewpoint can be seen in the studies of Robles (2014), Galperin & Johns (1998), and And & Coleman (2006) which showcase that despite the inherent “vagueness of value” that is attributable to culture, there are perceived benefits to its application. However, despite its apparent benefits, the aforementioned studies fail to show how the concept of culture should be attached to how companies should view talent as a resource. This may in part be due to the myriad of different cultures that exist and how each could have potentially different influences that cannot be measured resulting in the present-day fracas of different viewpoints (Robles 2014; Galperin & Johns 1998; And & Coleman 2006).
It is due to this that this literature review supports the notion of the parochial and ethnocentric management styles that the primary method of how companies should view the concept of talent management is through aptitude, experience, and expertise. This is not to say that this paper fully supports their methodologies when it comes to managing a multicultural workforce; rather, this paper is more in line with the notion that culture is simply far too vague to be considered as an appropriate means of being attributed to the concept of talent management and how it makes an employee valuable.
The goal of the next section is to show that the influence of local culture makes some types of organizational culture simply incompatible across different cultures and showcases how the development of an inclusive culture (i.e. a work culture that embraces diversity in all the procedures in a company) within a culturally diverse organization would be difficult to achieve.
Understanding Organisational Culture
Organizational culture can be defined as the set of values, assumptions, guidelines, and inherent beliefs that are an inherent aspect of how a company conducts its operations and interacts with its consumers and business rivals (Flynn 2015, 44). Flynn (2015) went into more detail regarding organizational culture by explaining that many of the practices and beliefs that are a part of such a system have their origin in the culture from which a company originates (Flynn 2015, 44). As such, the behaviors, morals and guidelines when it comes to how a company operates via its organizational culture can often be a reflection of the same cultural nuances found in a society’s culture (Flynn 2015, 44).
The reason why organizational culture is often a reflection of social culture is how it is necessary for a company to properly engage its employees in a setting and work environment that is familiar and is thus more conducive towards the work dynamic that the company is after (Cartledge et al. 2008, 33). For instance, it is unlikely for a small to medium-sized enterprise in France to adopt a Chinese organizational culture since it is unlikely that its French employees would be able to properly adjust given how divergent Chinese value systems are from its French counterpart. Since an employee’s culture affects their customs, values, and their inherent behavioral processes, and organizational culture of a company that significantly diverges from that of their employees is unlikely to reap the full benefits of its workforce (Cartledge et al. 2008, 33). Evidence of this was examined in the study of Kapoor & Sherif (2012) who delved into the outsourcing industry where diverging organizational cultures between the parent company and its outsourced division resulted in several issues related to protocols of communication, methods of planning and implementation, and how instructions are carried out from managers to lower-tier employees (Kapoor & Sherif 2012, 235). The main issue was that some outsourcing companies attempted to apply the same organizational culture that they had to their foreign employees. This encountered significant resistance and operational inefficiency since the employees simply were not used to how these protocols were set up as compared to the cultural nuances that they are used to (Kapoor & Sherif 2012, 239).
One of the best ways to see such an issue at work is to note the divergence between Japanese and American companies when it comes to the concept of overtime work. There is currently a widely held belief that the Japanese put in absurd amounts of overtime in their jobs as evidenced by the analyses of Galperin & Johns (1998) which examined the Japanese work culture from its heyday from the 1980s till the present. It showed that on average Japanese employees in numerous firms worked 12 to 14-hour shifts a day (Galperin & Johns 1998, 3). This was initially lauded as one of the reasons behind Japan’s meteoric rise in economic capability; however, further analyses revealed that the concept of overtime work for the Japanese was not mainly about actually working but was more due to work hours being connected to the concept of socialization and being part of a “company community” (Galperin & Johns 1998, 3). Even though some employees were done with their job, they tended to continue to remain at their desks for “moral support” for the other individuals that were still working. This resulted in some employees working slower so that they could extend their working hours for more socialization (Galperin & Johns 1998, 4). There is even the practice that lower-tier employees will not leave the company premises before their manager since it would look as if they were not working hard enough or that they were not being part of the “company community” (Galperin & Johns 1998, 4). Do note that this type of “social overtime” is not paid for by the company and Japanese employees merely do this due to the need for social conformity and the fact that individuals who do not follow the same process are often thought of as “outsiders” to the company (Galperin & Johns 1998, 4).
When examining this type of organizational culture at work, it is immediately obvious that it simply would not apply to American workers who have a greater sense of individuality and would not be willing to stay at work due to what can only be defined as enforced organizational socialization. The importance of this section for this research paper is that it showcases that the influence of local culture makes some types of organizational culture simply incompatible across different cultures and shows how the development of an inclusive culture within a culturally diverse organization would be difficult to achieve especially when taking into consideration the predominant local culture in a particular region or country.
Challenges in Talent Management in a Culturally Diverse Organization
There are several schools of thought regarding the implementation of talent management practices regardless of inherent cultural differences. This section of the study will elaborate on the identified challenges in talent management in a culturally diverse organization which have been derived from the previous sections.
Cultural Incompatibility Across Different Cultures and Organisational Cultures
Based on what has been shown in this literature review thus far, it can be concluded that different cultures result in different organizational cultures and, as a result, this creates issues when it comes to the implementation of any egalitarian method of talent management. The previous sections of this study were able to show that it is the systems and not necessarily the individual employees that result in the operational successes enjoyed by a company (Scholz 2012, 852). Organizational culture can be considered as a type of system in the grand scheme of a company’s operations resulting in it being somewhat attributable towards the egalitarian perspective where companies should focus on employees as a whole when it comes to talent management processes (Scholz 2012, 852). However, as seen in the section on culture and organizational culture, there are issues when it comes to compatibility across multiple cultures (Scholz 2012, 853). Simply put, some cultures (and their resulting organizational cultures) prefer practices and methods that are incompatible with the perspectives and methods of other cultures. Thus, the challenge for talent management in culturally diverse organizations in light of this revelation is being able to address this issue of incompatibility.
Differing Points of View Regarding Motivating Factors
The Lee (2009) study which examined the use of motivating factors in the workplace observed its application under the parochial, ethnocentric, and synergistic methods of managing cultural diversity and discovered a distinct divide in the method of motivation utilized (Lee 2009, 37). The parochial and ethnocentric strategies utilized a primarily extrinsic method of motivation while the synergistic method was able to utilize intrinsic methods (Lee 2009, 38). Lee explained that the reasoning behind this was due to the parochial and ethnocentric methods concentrating primarily on performance-based rewards as a facilitator for motivation while the synergistic strategy focused more on employee well-being and how they felt in their work environment (Lee 2009, 41).
This literature review argues that the reason why extrinsic methods of motivation were utilized in the case of the parochial and ethnocentric strategies was that intrinsic methods are simply incompatible with how the aforementioned methods are oriented. The parochial strategy ignores cultural differences while the ethnocentric method attempts to suppress and minimize them whenever possible (Lee 2009, 37). Extrinsic motivating factors are methods of motivation that focus on external rewards as how employees are motivated to work harder.
As such, extrinsic motivation does not focus on improving the work environment or making employees feel more welcome; instead, its approach is to motivate employees based on increased financial gain (Lee 2009, 39). The problem is that some cultures are not as motivated towards financial gain as they are towards intrinsic motivating factors (i.e. internal methods of motivation) (Mallol et al. 2007, 41).
Thus, it must be questioned how a company can implement a proper method of egalitarian talent management when there are multiple different cultural perspectives within an organization regarding what motivates them as individuals. Does the company attempt to appeal to them individually or does it superimpose a corporate-wide egalitarian talent management strategy that takes into account the organization as a whole and eschews individual cultures?
Issues with Employee Engagement Strategies Utilised
Another of the challenges associated with talent management in a multicultural workforce are issues associated with the employee engagement strategies utilized. Julian Chun-Chung & Austin (2008) stated that these strategies are meant to enhance the feeling of well-being of employees which makes them more motivated and aligned with the interests of the company. The problem with its application in a multicultural setting is that different cultures view the concept of engagement is widely different ways (Julian Chun-Chung & Austin 2008, 39). For instance, one of the employee engagement strategies utilized in Japanese companies involves the practice of “nomikai” which is a social aspect of work where employees get together after hours in order to drink alcohol and eat (Galperin & Johns 1998, 4). While on the surface this may not seem like a bad idea, the fact is that the practice is often embedded as a form of social compulsory behavior where employees are not required to attend but do so under social obligations. The method of employee engagement is meant to bring employees closer together but its compulsory nature may not agree with the cultural attributes of individuals who are outside of the Japanese culture who may want to do something else after work (Galperin & Johns 1998, 4). While this is a relatively mild example of differences in employee engagement strategies in order to make employees feel more welcome within the company, it does show certain aspects of cultural conflict when it comes to multicultural organizations (Galperin & Johns 1998, 4). For instance, what if the nominal practice was forced on a person that was staunch Muslim who does not drink alcohol? This has the potential to create significant interpersonal conflict that is primarily based on culture (Galperin & Johns 1998, 4). Attempting to force the issue also has considerable negative ramifications as Galperin & Johns (1998) stated that such methods contribute towards a decline in employee motivation in heterogeneous employee groups since employees often feel a lack of sufficient “connectedness” when it comes to their relationship with the company as well as with other individuals within the company (Miriam et al. 2013, 345).
Thus, it must be questioned what talent management practices have been implemented when it comes to addressing challenges related to discrimination, communication error, cultural misunderstandings, and a variety of similar instances that are associated with conflicting cultural factors in employee engagement strategies? Does the company attempt to force the issue, ignore it or attempt some means of cultural integration in the type of employee engagement strategy that they implement?
Through this section, numerous questions have been developed which focus on determining how multicultural companies address the challenges to talent management that have been derived from the earlier sections of this paper. The next section focuses on the methods of managing cultural diversity and acts as a suitable framework in examining the strategies that the HR managers that will be interviewed utilize
Methods of Managing Cultural Diversity
Parochial Multicultural Management Strategy
This management strategy ignores the differences between different cultures in their employee lineup and focuses on the idea that cultural differences do not have a significant impact on the operational capability of an organization (Cartledge et al. 2008, 33). Cartledge et al. stated that a parochial strategy does not see any significant opportunities that can arise from “pandering” towards the development of internal programs to promote cultural diversity such as forums, education sessions, or integrated diversity policies (Cartledge et al. 2008, 34). In essence, this strategy ignores the concept of culture and emphasizes individual performance and the integration of an employee into the greater whole of the company’s operations regardless of the different types of cultural groups that are a part of the company (Cartledge et al. 2008, 35).
Before proceeding, it is important to note that the parochial multi-cultural management is not discriminatory in that it hires individuals from only a specific culture; rather, this management strategy does acknowledge that hiring individuals from different cultures and countries is necessary to properly expand due to both limitations in staffing as well as their expertise in understanding those markets (Cartledge et al. 2008, 36). However, when applied to the practice of talent management, this strategy focuses more on the individual capabilities of the talented individuals hired and how it contributes to the company rather than how it contributes to a group dynamic based on their culture (Husting 1995, 30).
This strategy resolves the challenges involved in managing a multi-cultural organization by simply ignoring them. Individual differences based on culture are viewed as being largely irrelevant in the “grand scheme” of the company’s operations and, as such, by ignoring these differences when it comes to interacting with other employees, engaging in planning sessions or other similar activities, operations can proceed without interruption (Husting 1995, 33). While such a strategy may appear on the surface as being infeasible (i.e. ignoring a problem instead of fixing it), Husting (1995) helps to clarify why it continues to be effective by stating that even if the company does not place support for multiculturalism, there still exists an underlying organizational culture that acts as the basis behind professional interactions and group performance (Husting 1995, 34). From the perspective of Husting, employees become aware of what is expected of them when it comes to their job roles, how they should interact with people in the company and how to collaborate with other people when it comes to accomplishing group projects through assimilation (Husting 1995, 36). Mallol et al. (2007) go into greater depth regarding this practice by stating that the parochial multi-cultural management strategy can be compared to a one-way assimilation model wherein new employees into the company assimilate the basic “identity” and value systems that are a part of the organizational culture and interact with other people based on such a system (Mallol et al. 2007, 46). As such, integration is done through individual discretion and how quickly they can assimilate the underlying organizational culture that they are exposed to.
Do note that the parochial strategy does not attempt to suppress cultural diversity; rather, it simply focuses on its way of doing business regardless of the type of cultural groups that a company consists of (Mallol et al. 2007, 45). Examples of this type of strategy in action can be seen in the study of Shorter-Gooden (2003) which examined the expansion of the multi-billion dollar business processing and call center industry into locations such as India and the Philippines, Shorter-Gooden noted that a parochial strategy was often in effect wherein the local culture was ignored in favor of the outsourcing company’s internal organizational culture that focused on metric-based performance (Shorter-Gooden 2013, 211). Outsourcing company’s such as Convergys and Sykes did not attempt to overwrite the cultural practices that were present; instead, an emphasis was placed on how well employees were able to meet the metrics of the company. The organizational culture of these two examples did not care what type of culture their employees had and merely focused on how well the employees performed and their internalization of the company’s focus towards professional interaction and the provision of friendly service to its clients (Shorter-Gooden 2013, 212). The groups of employees that were managed by team leaders and operational managers were allowed a considerable amount of discretion when it came to their management styles and interactions based on their local culture so long as adherence to the main culture of the outsourcing company was considered as being their priority (Shorter-Gooden 2013, 213).
Ethnocentric Multicultural Management Strategy
The second strategy when it comes to managing talent in multi-cultural organizations comes in the form of the ethnocentric orientation which acknowledges the inherent differences in culture from the employees of the organization; however, it views this difference as a potential source of conflict instead of as a resource that could improve the company (Robles 2014, 60). From the perspective of Robles, this management strategy is highly insular and places the strategies, processes, and internal culture of the company as “being better” than other possible alternatives (i.e. the cultural standards, processes, or methods used by people from other cultures) (Robles 2014, 61). As a result, an ethnocentric management style actively attempts to reduce the effects and sources of cultural diversity in a company due to the perceived lack of any potential positive impact on the company’s operations (Robles 2014, 62). Examples of this type of talent management in action can be seen in the organizational culture of Japan which utilizes extensive use of the ethnocentric model of management (Galperin & Johns 1998, 4). While it is true that the work environment within Japan is largely homogenous since only 6% of the workforce is comprised of foreigners, the fact remains that when foreign workers do enter into a company, they are exposed to a largely ethnocentric management style that does its best to not only prevent cultural diversity of any sort, it also happens to eschew individual achievements in favor of group thinking and accomplishments due to its basis on the social aspects of the Japanese culture (Galperin & Johns 1998, 4).
In essence, under the ethnocentric perspective, it is the “home culture” of the company that takes precedence over the “foreign culture” of foreign employees in the company. Studies such as those by Au & Marks (2012) confirm that the ethnocentric strategy is quite prevalent in many international organizations at the present wherein “home standards” (i.e. the cultural and business standards that are based on the home country of the corporation) are utilized due to the belief in the “superiority” of the methods and organizational culture that is prevalent in the home region of the company (Au & Marks 2012, 277). The result is that regardless of the multicultural presence within a company’s workforce, their different cultures are still viewed as being far less effective than those from the home culture of the company (Au & Marks 2012, 277). Examples of multicultural organizations that utilize the ethnocentric strategy for talent management can be seen in companies that focus on the nationality of the owner. For example, there are companies like Asus that emphasize it is a Taiwanese company, Wal-Mart who continues to emphasize that it is an American company, and many others who base themselves on the country of origin of their company (Au & Marks 2012, 279). It is due to the attitude of thinking that other foreign cultures are inferior that the sources and effects of multicultural diversity are removed from the workplace. From the perspective of an organization that utilizes an ethnocentric strategy, the inclusion of new cultural behaviors into the company is an undesirable outcome since it not only affects the “purity” of the company’s internal organizational culture, but it may also result in workplace conflict (Au & Marks 2012, 279).
As such, by imposing its own culture over that of the workers, this strategy supposedly resolves all potential issues that relate to multicultural management problems in the workplace (Hofhuis et al. 2012, 883). To bring about its desired culturally homogenous environment within the organization, the ethnocentric strategy focuses on the promotion of a dominant culture that superimposes itself over the different cultures of the company’s workers (Shorter-Gooden 2013, 208). The goal is to change the behavioral patterns of the employees to be more in line with the dominant culture that is being promoted regardless of their cultural background (Hofhuis et al. 2012, 883). Hofhuis et al. go deeper into the application of the ethnocentric strategy by explaining that it in effect promotes a passive organizational culture where all employees are expected to conform and follow regulations even though potential alternative strategies could be put into effect that may be more efficient or better for the organization as a whole (Hofhuis et al. 2012, 885). The reasoning behind this is that ensuring conformity and change based on the “top-down” approach (i.e. commands from the top being obeyed by those below as opposed to the horizontal management approach where there is greater equality in the workplace) (Hofhuis et al. 2012, 886). For researchers such as Julian Chun-Chung & Austin (2008), such a management style promotes organizational complacency; however, such a practice continues to be in effect today due to its stability and its focus on a centralized approach that ensures the operations of the company continue unimpeded.
Synergistic Multicultural Management Strategy
The last strategy that will act as the framework for the analyses in the challenges in implementing talent management in a culturally diverse organization is the synergistic approach (Mallol et al. 2007, 41). This strategy differs from the previous two that have just been mentioned since it acknowledges that cultural diversity can help an organization and, as such, focuses on increasing its positive impacts while reducing its negative effects (Mallol et al. 2007, 44). This strategy focuses on the idea that by combining the best of different cultural approaches into the company’s strategies, the organization would be able to develop several unique approaches that would enable it to better operate in local and foreign markets (And & Coleman 2006, 79). This is done through a variety of programs that are meant to help employees recognize the various aspects related to cultural diversity, how multiculturalism is good for the company and how employees from different backgrounds can develop cooperative relationships that would help to enhance the operations of the company as a whole (And & Coleman 2006, 83). An example of this type of strategy in action and its effectiveness can be seen in the case of Windows Vista and how Microsoft implemented a synergistic strategy to resolve its problem. The development process behind Windows Vista was considered as being extremely problematic for Microsoft which resulted in a product that was not well received by consumers (And & Coleman 2006, 84). The reason behind this is connected to the fact that the software had its development scattered across numerous regions, timelines, and countries. The result is that the cultural differences between different work teams as well as different timelines created considerable issues when it came to proper communication and collaboration. To resolve this issue, the synergistic strategy applied by Microsoft involved the implementation of new education programs that were meant to help different teams better understand the multicultural workforce that they were a part of (And & Coleman 2006, 87). Aside from this, there were also instances of cultural exchange between the different global teams as well as the implementation of better processes involving methods of communication between people of different cultures (And & Coleman 2006, 87). The result of these endeavors was a far smoother development process resulting in massive improvements in both technical developments as well as the speed at which the software was created (And & Coleman 2006, 89). As seen in the positive responses regarding the Windows 7 system as well as Windows 8.1, the development process of Microsoft utilizing synergistic multicultural talent management was effective in not only improving employee outcomes but also ensured that the company was able to retain talented individuals that helped to continue to develop new iterations of the software for the company. What this shows is that synergistic management can be utilized effectively to manage the challenges inherent in a multicultural organization.
It is with these factors in mind that the succeeding sections of this critical literature review will first define talent and talent management, what diversity in the workplace entails, and the challenges that it brings about. These sections will utilize the frameworks that have just been mentioned to argue for or against their application based on how each framework would view the concept of cultural diversity in the workplace, talent, talent management, and the challenges that will be examined.
This examination sets the foundation for the study that will be conducted wherein the identified merits will be subject to present-day HR managers that deal with these issues daily.
Conclusion
What this literature review has argued is that it is systems and not “star employees” that are at the heart of the corporate performance. With these systems in mind, this paper has focused on how a multicultural workforce creates challenges in the application of these systems under an egalitarian talent management framework. This is due to how different cultural backgrounds often cause interpersonal conflict as well as render some talent management strategies ineffective. To shed more light on this issue, this paper delved into the three most prominent management strategies in resolving a multicultural workforce issue and these consisted of: parochial, synergistic, and ethnocentric. These strategies showcased how companies attempt to resolve the issue of multiculturalism by ignoring it, supplanting it with their own culture, or integrating it. From the application of strategies such as the parochial model or the ethnocentric model, their effectiveness as methods of talent management is cast into serious doubt even though they are among the most widely utilized strategies today when it comes to managing multicultural organizations. This literature review argues that despite how the parochial and ethnocentric models attempt to reduce workplace conflict by outright ignoring the issue of diversity or by superimposing the company’s culture on the workers, this results in a highly flawed talent management strategy that would cause more problems than it solves. This is due to the potential for workers to feel despondent, lack motivation, and be more likely to leave the company resulting in problems related to retention. To shed more light on this issue and examine how companies address the challenges brought up by this paper, the researcher will examine what methods do present-day HR departments utilized to address the challenges of talent management in a multicultural organization. The parochial, ethnocentric, and synergistic strategies will be utilized as a frame of reference to examine where the strategies of the HR departments fall under and why they chose such an orientation.
Methodology section located in another file
Questions to be utilized in the Analyses and their Justification for use in the Study
The following questions build on the research conducted by Hofhuis et al. (2012) which focused on how companies viewed cultural diversity and management. The primary focus of these research questions is to determine how the companies view talent management, cultural diversity, and how do they address the challenges of talent management in culturally diverse organizations (Gelens et al. 2013, 341). Each question will be followed with a justification behind its use in the study and how it relates to what this research paper is attempting to examine:
Questions to be utilized
- Within your organization, how is cultural diversity represented? (This open-ended question starts off the interview by examining whether the organization in question has cultural diversity and, if so, how does the company view its presence within the organization) (Hofhuis et al. 2012).
- Within your organization, how many employees come from different backgrounds (This is a closed question that enables the researcher to determine the level of diversity within the organization. This question enables further analyses as to whether or not greater levels of diversity impacts the management strategy utilized) (Hofhuis et al. 2012).
- When examining your current employee pool, what is the reason behind your company having a culturally diverse set of employees? (This open-ended question helps the researcher determine the reasoning of the company behind the presence of cultural diversity within the company. Through this question, the researcher determines whether the presence of a culturally diverse workforce was an intentional aspect of the company’s operations or was unintentional and merely came about as a direct result of expansion and coincidence).
- What does your company think about the presence of cultural diversity and how does it affect the talent management practices that are present within your organization? (This is an open-ended question that focuses on how the organization being examined views the concept of cultural diversity and how it affects their talent management practices. It seeks to examine the challenges encountered, the positive or negative effects, and helps to determine where the company falls under parochial, synergistic, or ethnocentric) (Hofhuis et al. 2012).
- After your views in the previous question, how does your company address the aforementioned talent management challenges in a culturally diverse organization? (This question goes straight to the strategies that the company implements to determine what methods, aside from the parochial, synergist, or ethnocentric orientations, the company utilizes to address aspects related to motivation, retention, employee engagement, etc. This section helps to answer the core question that is at the heart of this research paper) (Hofhuis et al. 2012).
- How does your organization view the concept that people from different cultures may have diverse needs when it comes to the talent management processes implemented? (This question focuses on the issues presented in the culture and organizational culture section of the literature review where it was revealed that there are issues when it comes to talent management compatibility. Simply put, some talent management strategies are incompatible with others and, as such, through this question the study examines how HR departments help to address this issue) (Hofhuis et al. 2012).
- In what way is cultural diversity integrated into your company’s talent management practices? (This is an open-ended question that focuses on how companies integrate cultural diversity and talent management. This question helps to clarify what practices are currently in place and how they are implemented) (Hofhuis et al. 2012).
- In your opinion, what has been the outcome of taking into consideration cultural diversity in your company’s talent management practices? Positive or Negative? Please elaborate (This is an open-ended question that focuses on the perception of the HR personnel regarding the aforementioned practice) (Hofhuis et al. 2012).
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