Introduction
The interplay between the global economic and social frameworks has become formidably strong. The interaction between social and economic structures is characterized by high connectivity and interdependence which requires critical apprehension of the interaction between individuals in the structures. The rapid expansion of international business and multinational corporations has led to increasing concerns for cross-cultural management of human resources. International trade has facilitated substantial opportunities for the intermingling of different cultures over many years. However, the implications of cross-cultural influences on HRM practices have been observed as prominent concerns for international business managers (Dowling & Engle, 2008, p. 5). Theoretical studies reflect on the distinct approaches that could be followed by different countries to ensure appropriate business management strategies are in place to address their specific objectives while catering to the national cultural precedents of the host country. The following literature review emphasizes the illustration of the distinct dimensions of national culture and their impact on the specific HR function of recruitment and selection in two different countries. The countries assumed for comparison in the review are the UK and China which have formidable international business ties China has potential prospects for Western multinationals to establish their subsidiaries while the UK has become a favorable playing ground for investors all over the globe after Brexit. A critical review of the literature enables the interpretation of the influence of culture on the human resource management functions of multinational organizations. It also facilitates flexible opportunities to derive recommendations for limiting the friction between different facets of the national cultures of countries.
Literature Review
Human Resource Management
The origins of human resource management can be traced back to the Industrial Revolution era when labor unions were formed for the betterment of workers and the fulfillment of their basic demands. The subsequent application of human resource management functions in different organizations over the years has resulted in the proliferation of wide-ranging definitions of HRM (Meshksar, 2012, p. 5). Human resource management has been defined as the management function concerned with the strategic objective of aligning its human assets for accomplishing competitive advantage in the contemporary business environment. Human resource management can be generically described as the function executed by an organization through the precise utilization of human capital to attain personal as well as organizational objectives. The strategic functions associated with human resource management include planning, organization, direction, and control. HR professionals are responsible for the procurement, training and development, remuneration, integration, sustenance, and separation of human capital while addressing societal, organizational, and individual objectives (Meshksar, 2012, p. 6).
Culture
The review of definitions of culture mentioned in business management literature is essential for illustrating the cross-cultural context of HRM. The concept of culture has radically expanded in prominence and popularity due to specific reasons. Cultural frameworks are different for different countries to a certain extent. The behavior of different cultural groups could vary in similar circumstances due to the disparities in underlying values and beliefs. The significance of culture in the development of social institutions and business organizations requires a basic understanding of culture (Meshksar, 2012, p. 19). The general definition of culture is indicative of the combined entity comprising morals, customs, knowledge, art, belief, habits, capabilities, and traditions that are developed by members of a society. It has been observed that culture can be apprehended based on two general dimensions which are the visible dimension and the invisible dimension. The visible dimension reflects the behavior of people in a society which depicts their culture. Major examples of visible dimension constituents include food habits, religious practices, and family structures. Invisible dimensions are observed in the values, beliefs, and assumptions such as societal precedents and community laws as well as the treatment of aging individuals in the family. Therefore, culture serves as the most reasonable entity for perceiving the immediate environment’s rules, norms, roles, and values which could account for options of flexible international HRM practices (Meshksar, 2012, p. 19). Since culture is formidably associated with individuals, the impact of culture on HRM practices is evident. Furthermore, the ambiguities related to the definition of culture and the varying aspects such as explicit and implicit factors associated with culture create confusion for international HR managers to adapt their styles and management design to the national culture of a host country. Individual perceptions of culture as held by managers reflect their capabilities to address the variations in HR functions in a foreign country. It has also been observed that a lack of research on national culture and individuals in an international business environment has led to formidable depreciation in the business performance of many multinational corporations. The misinterpretation of cultural behavior is reflective of outcomes such as conflicts of organizational HRM frameworks with the national culture setting in the host country (Meshksar, 2012, p. 25). The difference in management values, functions, and practices which is observed from country to country suggests that the cultural aspects of a country are the most impactful on the social, political, and economic structure. These changes are responsible for the introduction of plausible strategies for the development of cross-cultural HRM approaches.
Hofstede’s cultural dimensions
International business managers were confronted with the complex task of interpreting the culture of another country. Trade between the UK and China required business managers from the former to understand the cultural framework of the latter. However, the lack of a precise instrument for estimating the type of culture prevalent in a specific country created potential setbacks for human resource managers to frame appropriate approaches for catering to the HRM requirements in an international business assignment.
Distinct managerial functions associated with human resources including recruitment and selection, compensation and benefits, performance appraisal, training, and development are dependent on the apprehension of national cultures. This literature review is directed towards the apt interpretation of the HRM approaches in a cross-cultural context and the dimensions of national culture presented by Hofstede can assist in drawing feasible comparisons between human resource practices in the UK and China (Pu, 2010, p 21). Therefore an illustration of the different cultural dimensions mentioned in Hofstede’s model can be a suitable contribution to the literature review.
Hofstede’s work was directed towards the background of existing cultural differences between nations and the impact of these differences on the perceptions of HR managers and HR practices. National culture was characterized by five dimensions by Hofstede which are independent of each other and are associated with formidable influence on the attitudes and values related to employees (Pu, 2010, p 21). The dimensions include masculinity/femininity, individualism, power distance, uncertainty avoidance, and long-term orientation. These dimensions indicate the general behavior, values, and beliefs observed predominantly in national culture.
Power distance
Power distance is defined as the treatment of inequality by society. The basis for the inequality could be wealth, power, prestige, and intelligence. National cultures that are reflective of higher power distance indicate that employees are more likely to follow the direct supervision of the higher authorities. On the contrary, societies characterized by low power distance reflect the limited tolerance for inequalities, and every individual is provided equal development opportunities (Pu, 2010, p 24).
Cultures with limited power distance are more likely to restrict the unrequited use of position and the increased access to superiors. Hofstede suggested that the power distance index is noted as an indicator of the extent to which the less powerful people of a country perceive the unequal distribution of power. The major influence of social values and norms on the power distance index cannot be undermined and the power distance is observed inconspicuously as well as obviously across varying national cultures. The impact of power distance on the HR functions and practices of the organization could be observed through its association with decision-making leadership, power centralization, and leadership in business organizations.
Organizations with high power distance are highly inclined towards dependence on leaders which could also indicate the dependence of subordinates on the elitism depicted by upper managers. Consideration of the cases of the UK and China reflects on the power distance index of both countries. In the case of the UK, the power distance index is 35 while in China; the power distance index is 80 which suggests a drastic difference. Hence the prospects for UK-based organizations to implement plausible HRM practices in China have to be derived from the disparity. The higher power distance observed in China is responsible for the polarization of superior–subordinate relationships and the prominent observation of optimism among people concerning leadership. On the contrary, the UK national culture obtains a power distance index of 35 which suggests that inequalities are minimized among the people despite the traditional class system established by the British.
The PDI of the UK is also reflective of the fact that equal opportunities are provided to people of different classes which ultimately leads to the perception of a level playing ground for organizations from different countries (Pu, 2010, p 45). UK-based organizations are familiar with the low power index which increases the flexibility of reporting and communication mechanisms between superiors and subordinates alongside the ease of accessing superiors. Every employee in an organization is liable to accomplish improvements based on their professional performance. Furthermore, managers are prohibited from unauthorized use of their power for their interests and could be punishable by law in certain cases. Organizations based in the UK would have conflicts in terms of power distance with the Chinese national culture since the predominance of superior authority and unrequited use of power could not comply with the organizational values and beliefs.
Some of the other prominent issues that could be noticed in the case of differences in the power distance index between the UK and China include the apprehensions of superiors to communicate with subordinates, the excessive dependence of employees on the assistance of managers, and misinterpretation of decision-making styles (Pu, 2010, p 24). Decision-making styles in a host country are comprehensively dependent on the suggestions acquired from employees which are negligible in a high power distance culture. HR managers are also required to understand the distinct outcomes that could be observed in the HR functions and practices due to the disparity in the power distance index of China and the UK.
Individualism
Individualism and collectivism are included in the second dimension of national culture highlighted by Hofstede. This dimension illustrates the extent to which individuals are focused on personal interests and values. National cultures which are characterized by higher individualism reflect on the natural inclination of an individual towards personal values and requirements which are addressed by individual efforts.
Relationships in individualistic societies are preferred more with self rather than with others. Collectivism is the opposite paradigm of individualism and it suggests the accomplishment of social objectives for the betterment of the community (Pu, 2010, p 51). National cultures that reflect on collectivism profoundly are noted for prominent characteristics such as concern and loyalty among members of a group and leveraging personal interests for group objectives. The influence of individualistic and collectivist patterns followed in specific cultures on the orientation of human resources is explicitly observed in the literature. Individualistic cultures promote the working of individuals solely for the accomplishment of personal goals and in such scenarios; human resources are more likely to emphasize their importance in the organization, craving for appraisal and flexible opportunities for upward mobility.
These advantages which are observed in the case of individualistic national cultures can also be limited by the pitfalls such as overestimation of personal capabilities and contribution to group work. These factors could create substantial setbacks for the performance of human resources in individualistic cultures. Collectivism favors the working of members in a team which is also indicative of the limitation of differences between individuals. Collectivism would be specifically feasible in low power distance cultures owing to the facilities for communication and flexibility available in the organization.
However, collectivism is also related to potential drawbacks such as increased dependence of employees on other members of the group or organization. Employees in collectivist national cultures are also liable to underestimate their abilities and contribution to the strategic advantage of the organization which leads to a depreciation in HRM performance. The observed individualism in the UK and China could help draw references to the application of HR practices and functions. The individualism index observed in China is 20 which suggests that the national culture of China is directed towards collectivism wherein people are observed to act in the interests of the community.
The preferences of employee commitment to organizations in China are also depicted to be low in China’s collectivist culture. Collectivism in China’s culture also indicates that the relationships between people are prioritized over the relationships with the company and objectives. The UK, on the other hand, scores 89 in terms of individualism according to the analysis of Hofstede’s five dimensions model. Encouragement of emphasis on personal interests and future aspirations, as well as possible contributions to the society, could be accounted as profound characteristics of an individualistic society as observed in the UK. Personal fulfillment is also observed as a prominent attribute in an individualistic society and therefore the impact of individualism in national culture on HRM practices is reflective of limitations on the disparity of authority.
HRM practices followed by UK-based organizations would face considerable difficulties in the completion of their HR functions in China owing to the massive difference in the individualism index. The notable issues that could be observed in terms of HRM functions and practices due to variation in individualism indices include favoritism in Chinese culture, as well as the prominence of in-group relationships, which could be difficult for UK-based organizations that are reliant on the performance of individual employees for strategic success. Employees of a UK-based multinational corporation cannot adapt easily to the collectivist dimension observed in the Chinese national culture owing to their individualistic orientation. Leaders are likely to experience issues such as the perception of managers as autocratic without any formidable concern for company benefits as compared to their interests. The mistakes that could be incurred by employees due to an emphasis on collectivism and relationships could not be perceived favorably by managers with an individualistic approach.
Masculinity
The masculinity dimension highlighted by Hofstede’s model of national cultures reflects the perception of gender roles in society. Societies that favor high masculinity are more likely to be emphasized on the precedents for men to be tough, assertive, and directed towards material success while women are judged based on other precedents such as modesty, delicacy, and concern for life quality (Pu, 2010, p 42).
On the contrary, a feminine society envisages equal roles of men and women in a society in which members of both genders are required to be concerned about the quality of life. The observation of the masculinity index of China and the UK indicate the same ranking i.e. 66 which suggests that cross-cultural HRM practices would not be affected by the dimension of masculinity in the national culture. Even if there is no scope for friction between national cultures in the context of masculinity, the aspect of equal opportunities and competence-based HRM functions could not be undermined (Pu, 2010, p 42).
Uncertainty avoidance
Hofstede also stated that a nation’s capability to respond to ambiguous changes that emerge all of a sudden can be described as uncertainty avoidance. The existence of variable uncertainties in the future could not be undermined and the extent to which a national culture is tolerant of the uncertainties is reflective of the uncertainty avoidance index. Countries with higher degrees of uncertainty avoidance are more likely to follow precautionary measures alongside predominant concerns for events of the future.
On the other hand, countries with lower uncertainty avoidance index are more likely to bend the rules and care less for the future. China and UK have respective scores of 30 and 35 according to Hofstede’s analysis. Therefore the disparities in HR functions would be limited in cross-cultural business assignments through this observation (Pu, 2010, p 47). However, the consideration for notable issues such as procrastination, limited upward mobility, inappropriate utilization of organizational resources, and perception of managers as non-actors in the organizational framework. The impact of the uncertainty avoidance dimension of national culture on HR functions such as recruitment and selection as well as training and development could be broadly observed. The flexibility of the regulatory mechanisms observed in low uncertainty avoidance cultures could be a setback for HRM functions.
Long-term orientation
Long-term orientation is the dimension in national culture as observed in Hofstede’s model which is largely associated with Confucian principles of addressing the existing and future challenges alongside maintaining prolific ties with past experiences. Societies with higher long-term orientation are more likely to adopt pragmatic approaches and therefore their perception of truth is decided by the variables of context, situation, and time. China has a potentially higher long-term orientation with a score of 87 in this dimension and therefore the culture is susceptible to changes in tradition to cater to the evolution of contemporary conditions (Pu, 2010, p 47).
On the other hand, the UK scores a moderate 51 which reflects on the outcome suggesting that changes in British cultural practices are minimally possible. Therefore the dimension of long-term orientation in the cross-cultural context of HRM is bound to create conflict on the grounds of the disparity between the national cultures of the UK and China. However, the estimation of a higher long-term orientation of the Chinese national culture could create potential setbacks for cross-cultural human resource management. Some of the profound issues that could also be noticed in the context of disparities in long-term orientation in the national cultures of the UK and China are responsible for dictating the differences in HRM practices.
The aspects of long-term orientation complemented with the power distance index in China indicate outcomes such as blind obedience of employees and limited confidence in employees. These factors could influence HR functions such as training and development as well as recruitment and selection of employees for UK-based organizations in China.
Cultural dimensions and impact on HR practices
The cross-cultural impact on HR practices is observed due to the observed disparities in specific dimensions such as individualism, masculinity, and long-term orientation. Some of the notable issues that could arise for HR functions are due to the interplay of dimensions of the national cultures of the UK and China. However, observation of the specific differences in recruitment and selection processes followed in the UK and China would serve as a prominent example for the literature review presented in this report. The recruitment practices in UK organizations involve walk-in applications, advertisements, and public employment agencies. The advertisement is done through the media of newspapers, the internet, and magazines. Selection approaches followed by UK firms include interviews, reference checking, and application blank. The prominent existence of facilities for internal and external recruitment in UK organizations is also a characteristic indicator of the HR practice of recruitment and selection.
Candidates are selected based on their capabilities to address the job requirements such as value for time and resources and work experience (Singh, 2014, p 55). The organization’s HR department is responsible for executing the interviews and generally three to four rounds of interviews and written tests for evaluating the aptitude and competence of the candidates. The recruitment and selection process is transparent and therefore the impact of cultural dimensions could be profoundly observed in the case of HRM practices followed in the UK. (Singh, 2014, p 55)
On the other hand, China depicts a different approach to recruitment and selection with the integrated effect of cultural dimensions. Collectivism in the national culture of China envisages the prioritization of Chinese nationals for selection in job roles. The recruitment methods followed in China are reflective of internal and external recruitment and candidates are informed about the vacancies through public listings. Foreign organizations in China are required to avail recruitment services from an authorized employment agency supervised by the government labor department. Selection of candidates in China is facilitated by rounding on the individuals meeting the majority of criteria for the job description effectively.
The different selection methods adopted by Chinese firms are also reflective of the opportunities to evaluate the competencies of the candidate and the possibilities of their implementation in the organizational context. However, the prominent differences that China depicts in terms of recruitment and selection practices with that of the UK include the major implications of collectivism in the national culture of the former. The distinct concerns for power distance are reflective of the major reforms in the job analysis aspect of the HR practice of recruitment and selection (Madan, 2013, p 232).
The design of the job descriptions is tailored to the hierarchy of authority observed in Chinese organizations traditionally. However, the scope for change could be observed in the higher long-term orientation of the national culture in China since the increasing frequency of foreign candidates applying for specialized jobs in China requires major changes in recruitment and selection approaches followed by Chinese firms (Madan, 2013, p 232).
Conclusion
The report presented a conclusive literature review on the distinct cultural dimensions of national culture, their relevance to HRM practices in cross-cultural contexts, and the impact of cultural dimensions on one of the HR practices i.e. recruitment and selection. Critical reflection on the different dimensions of national culture stated by Hofstede in the context of the two selected countries i.e. the UK and China provides an impression of the flexibility of cross-cultural exchanges between both countries. The comparisons were useful for estimating their possible influence on the recruitment and selection procedures in the UK and China.
References
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Pu, J., 2010. Cross-Cultural Human Resource Management. pp. 22-47
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