International Human Resources

        1.Introduction

        International human resource management is very much essential in shaping global careers. It is at the very heart of multinational coorporations. By definition, the field of international human resource management broadly covers issues related to the management of people in an international context. This includes cross-border mergers, acquisitions and international joint ventures. With more and more people working for international corporations or global international supply chains, the study of international human resources and industrial relations is becoming ever more important. Cross-border mergers, acquisitions and international joint ventures are an access for multinational corporations to enter foreign market and economy. There  are however, barriers to overcome. These barriers are namely, unique risks, differences in national culture, customer preferences, business practices, and institutional forces as well as uncertainty and information asymmetry in foreign markets. This paper highlights how HR practitioners can utilise the Hofstede Model to better understand the unique risks varying in different regions and to aid in decision-making in terms of tackling national culture and customer preferences as well as overcoming uncertainties.. As GLOBE studies focuses on leadership and organizational effectiveness, it can be used to effectively understand other barriers such as Business practices and  Institutional forces.

2.  The Hofstede Multi- Focus model

        The Hofstede model is a multi focus 5 dimensional model published by Dr. Geert Hofstede in the late 1970s after a decade of research based on the people who worked in IBM across more than 50 countries. To explain briefly, he initially identified four cultural dimensions that can distinguish one coulture from another. Namely , the dimensions are Power Distance Index (PDI), Individualism (IDV), Masculinity (MAS) and Uncertainty avoidance Index (UA). The study was done by conducting surveys twice around  70 countries and regions covering various and substantial questions about values. Hofstede G. added a fifth Dimension,based on Confucian dynamism, after conducting an additional international study with a survey instrument developed with Chinese employees and managers. The fifth dimension, is Long-Term Orientation (LTO) and was applied to 23 countries.( Shi & Wang, 2010).  Unique risks varies in different region of the world. It is evidently “difficult to bring two organisations that come from different parts of the world geographically and culturally into one, forgetting that business at the end of the day a human activity can prove costly indeed (Bundy, 2008).

1. Using the Hofstede model to understand  National Culture

1.          One of the factors human resource practitioners need to focus on are the different cultures of countries foreign to the parent company. It is important for companies to integrate harmoniously in order to increase success in the long run.  A failed merger integration can prove problematic in the long run, so its best to take the steps early in the process (Jamrozinski, 2016).  National culture are set of norms, behaviors, beliefs and customs that exist within the population of a sovereign nation. International companies strive to develop management and other practices in accordance with the national culture they are operating in. It is important for practitioners to focus on promoting assimilation by understanding the national culture, through cross-cultural awareness training. The risk of neglecting this barrier is employees reluctance. Employees reluctance might pose a threat to the objective of the cross-border M&A. Employees may disagree and feel reluctanct to be managed by another country, influencing analysts' assessment ( DG Internal Market and Services, 2005)

2.2 Business Practices

           Hofstede Dimension helps to study the differences between Pakistani and New Zealand culture in depth. The concept of Power Distance Index (PDI) defined as the extent to which the less powerful members of institutions and organisations within a country expect and accept that power is distributed unequally (Hofstede, 2011). Pakistan has a significantly higher PDI score than New Zealand. Lower level employees dont have ability to interfere with decision making as management takes on the top down approach. In Pakistan, it is deemed unacceptable to approach a higher level manager to ask for feedback or ask too many questions about business related problems. It will be considered as a reflection of bad expertise as a manager. New Zealand on the other hand has a low PDI score. Almost eighty percent of employees have access to their senior manager. It is common for employees to address their counterparts and managers on first name basis. Some people are richer than other, but in New Zealand wealth carries no high prestige and no entitlement of leadership.  It is important for practitioners to focus on promoting assimilation by understanding the national culture, through cross-cultural awareness training. The risk of neglecting this barrier is employees reluctance. Employees reluctance might pose a threat to the objective of the cross-border M&A. Employees may disagree and feel reluctanct to be managed by another country, influencing analysts' assessment ( DG Internal Market and Services, 2005). Good business practices, especially in accordance to the rules employed by the host country, helps to maintain accountability structure. Business practices and culture goes hand in hand. Human resource practitioners should highly support cross-fertilization of ideas. This encourages information to flow freely between expatriate, host country and parent country.