The objective of the study is to investigate and analyze the influence of culture on human resource management practices. The research is expected to answer the importance question: Are HRM practices influenced by national culture or not? It is generally accepted that the practices of management is considered to be universal until Hofstede (1980:42) published the seminal work: Culture’s Consequences: International Differences in Work Related Value in 1980. Hofstede’s work is the most popular in cross culture management studies so that his framework in national culture will be used in this research. Structural equation model (SEM) with Two Step Model Building Approach is used to test structural theory. It is used to test the hypotheses model statistically to determine the extent to which the proposed model is consistent with the sample data. SEM incorporates both confirmatory factor analysis and multiple regressions to estimate a series of interdependent relationship simultaneously. The results of descriptive analysis indicate that the national culture dimensions tend high for collectivism, power distance, masculinity and uncertainty avoidance, quite different from Hofstede (1980) findings that Indonesia has high collectivism, high power distance, and moderate in masculinity and low in uncertainty avoidance. While in Second Order Confirmatory Factor Analysis, collectivism, power distance and uncertainty avoidance are confirmed as a dimension of national culture but masculinity are not. In structural testing, it indicates that two hypotheses i.e. the influence of national culture on career development and compensation are supported but the influence of national culture on staffing and participative management are not supported. Organizational culture also shows influence on staffing and participative management. One of human resource management practices i.e. career development influence on organizational performance but others such as staffing, participative management, and compensation does not. This study shows that national culture and organizational culture influence on some of human resource management practices. Therefore, this research supports the divergence theory that human resource management practices are culture-bound.

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Submitted to:
Md. Abdul Muhith Chowdhury
Senior Lecturer
Department of Business Administration
Leading University, Sylhet

3. Md. Alimuzzaman
1201010249
Mahmudul Hasan
1201010181
Mahmudul Karim
1201010205
Masum Hussain
1201010202
Zakiatunnessa Uma
1201010007
Rabeya Rahman
1201010091

4.  Culture: It’s the characteristics of a particular group of people defined by
everything from language to behavior.
 Company: It is a voluntary association formed and organized to carry on a
business.
 Values: Values refers to stable life goals that people have, reflecting what is
most important to them.
 Behavior: Behavior is the range of actions and mannerisms made but
individuals , organisms or an artificial entities.
 Organization: an institution or social unit, composed of two or more people
for achieving common goal under formal procedure.
 Across nation: in a global arena crossing the national boundary.
 IHRM: The process of procuring, allocating and effectively utilising human
resources in an international business is called international human
resources management (IHRM).

5.  Globalization is an important factor that influences organizations
that compete for customers with high expectations for
performance, quality, and low cost. International movements of
goods and services have accelerated exponentially to $7.9
trillion. Trade barriers have decreased with the advent of free
trade zones in Europe, North America and Asia, including the
European Union (EU), North American Free Trade Agreement
(NAFTA), and the Association of Southeast Asian Nations
(ASEAN).

6. Organizational and HR principles associated with liberal
market economies are as follows:
 ‘freedom to manage’;
 emphasis on short-term competition;
 flexible deployment of staff;
 pay linked to individual performance;
 training regarded as an ‘overhead’.

7. Clearly, there are some powerfully intuitive connections between
the cultural stereotypes and orientations theorized by Hall and
Hall (1990), Hofstede (2001) and Trompenaars (1993), and
observed manifestations of HRM across regions.
 preferred organizational structures – flat/tall,
consultative/authoritarian, and so on (power distance);
 recruitment, whether based on merit or nepotism (achievement
v. ascription, high context);
 whether pay is individually determined (individualism v.
collectivism);
 the level of statutory regulation in employment (uncertainty
avoidance);
 maternity, paternity, childcare provisions, and so on (masculinity
v. femininity).

8.  A culture refers to a system of shared meaning held by the
organization’s members that distinguishes the organization from
other organizations. It is understood as the customs, beliefs, norms
and values that guide the behaviour of the people.
 It has normative value
 It is a group phenomenon
 Passed on from generation to generation.

9.  Learned
 Unconscious
 Shared
 Integrate
 Dynamic
 Way of life
 Universal
Other forms of culture
 Dominant culture
 Subcultures
 Organizational culture
 Occupational Culture

10.  It has a boundary, defining role that creates a distinction between one
organization to others.
 It conveys a sense of identity for organization members.
 Culture facilitates the generation of commitment to something larger than
one’s individual self-interest.
 It enhances the social system stability. Culture is the social value that helps
hold the organizations together.
 The culture serves us a sense-making and control mechanism that guides
and shapes the attitudes and behaviours of employees.
 Culture enhances the organizational commitment and increases the
consistency of employee behaviour.
 Culture reduces ambiguity among its members.

11.  HR activities
 -procurement,
 -allocation and
 -utilization
 Types of Countries
 -Home Country
 -Host Country
 -Other Countries
 Types of employee
 Parent Country Nationals(PCNs)
 Host Country Nationals(HCNs)
 Third Country Nationals(TCNs)

12. Parent Country
Nationals(PCNs)
Host Country
Nationals(HCNs)
Third Country
Nationals(TCNs)
Familiarity with home office,
goals, practices
Familiarity with the situation
in host-country
Salary & benefit
requirements lower than
that of PCNs
Easy organisational control
& coordination
Lower hiring costs May be better informed
about host country
environment
Difficulty in adapting to
foreign country
Difficulty in exercising
effective control over the
subsidiary’s operations
Host country govt. may
resent hiring TCNs
Excessive cost of selecting,
training & maintaining
expatriates
Communication problems
with home office personnel
May not return to their
country after assignment

13.  The study of Geert Hofstede presented possible origins as well as
consequences for management behaviour. Initially, four dimensions were
identified that possessed universal applicability across cultures, then a fifth
subsequently being added
Power distance
Uncertainty avoidance
Individualism versus collectivism
Masculinity versus femininity
Long-term versus short-term orientation

14. 1. Globalisation of Business
2. Effective HRM  determinant of success in international
business
3. Indirect costs of poor performance in international
business very costly
4. Movement to network organisations from traditional
hierarchical structures
5. Significant role in implementation & control of strategies
14

15. Key Issues in International HRP
• Identifying top management potential early
• Identifying CSF for future international
managers
• Providing developmental opportunities
• Tracking & maintaining commitment to
individuals in international career paths
• Tying strategic business planning to HRP &
vice-versa
• Dealing with multiple business units while
focusing on global & regional strategies
15

16. Ethnocentric
Approach
• Key
management
positions held by
parent-country
nationals
• Appropriate
during early
phases
• P&G, Philips
Polycentric
Approach
• Host-country
nationals hired to
manage
subsidiaries
• Parent-country
nationals occupy
key positions at
corporate HQ
• HUL
Geocentric
Approach
• Seeks best
people for key
jobs, irrespective
of nationality
• Underlying
principle of a
global
corporation
• Colgate-
Palmolive
Regiocentric
Approach
• Variation of
staffing policy to
suit particular
geographic areas
• Provides a
'stepping stone'
for a firm wishing
to move from an
ethnocentric or
polycentric
approach to a
geocentric
approach
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3 categories of employees can be hired – parent country nationals (PCNs),
host country nationals (HCNs) & third country nationals (TCNs)

17. 17
Determining the
need for an
expatriate
Selection
Process
Pre-assignment
training
Departure
Post-arrival
Orientation &
Training
Crisis &
Adjustment
Crisis &
Failure
Repatriation
& Adjustment
Reassignment
Abroad

18. Expatriate
Selection
Family
Req’ments
Cross-cultural
Suitability
MNC
Req’ments
Language
Country-
cultural
Req’ments
Technical
Ability
Individual
Situation
Expatriate Selection

19.  The work of Trompenaars and Hampden-Turner (1997) serve to
supplement Hofstede’s study by offering an alternative set of cultural
dimensions, and by placing a focus on meanings, or humans’
interpretations of the world around them.
Universalism versus particularism
Individualism versus communitarianism
Achievement versus ascription
Neutral versus affective
Specificity versus diffuseness
Sequential versus synchronic
Inner versus outer directedness

20. Objectives to be achieved
• Attract qualified & interested employees
• Facilitate movement of expatriates between subsidiaries
• Consistent & reasonable relationship between pay levels
• Cost-effective
Problems faced in deciding remuneration package
• Discrepancies in pay between parent, host & third country
nationals
• Vary compensation based on family situation of expat
• Remuneration when re-entering parent-country
organisation
• Must accommodate changes in international business
environment
20

21. Preparation
Physical
Relocation
Transition
Readjustment
 The activity of bringing
the expat back to the
home country
 Can cause re-entry
shock or reverse culture
shock
 Reasons
• Posting period over
• Children’s education
• Not happy with overseas
assignment
• Failure to do a good job
21

22. 22
1. Cross Cultural Training
2. Language Training
3. Practical Training
4. Management Development &
Strategy

23. 23
Culture shock is a term used to describe the anxiety and feelings (of
surprise, disorientation, confusion, etc.) felt when people have to operate
within an entirely different cultural or social environment, such as a foreign
country.

24. Handling Labour Issues
• Delegated to foreign
subsidiaries
• Labour relations centralised
when inter-subsidiary
production integration is
present
• Depends on nationality of
ownership of subsidiary
• More intervention when
subsidiary is of strategic
importance
Union Tactics
• Strike  most common tactic
• International Trade
Secretariats (ITS)
• Lobbying for restrictive
national legislations
• Intervention of ILO, UNCTAD,
EU & OECD
• Principles of ILO
• Freedom of associations
• Right to organise &
collectively bargain
• Abolition of forced labour
• Non-discrimination in
employment
24

25.  Culture – customs, beliefs, norms & values that guide behaviour of
people in a society or passed on from one generation to the next
 Multiculturalism – people from many cultures (countries) interact
regularly
 Benefits
• Greater creativity & innovation
• Sensitivity in dealing with foreign customers
• Possibilities of hiring best talent
• ‘Super organisational culture’
• Universally acceptable HR policies & practices
 Functions of IHR manager
• Possess strong personal identity
• Have knowledge of beliefs & values of different cultures
• Display sensitivity
• Communicate clearly according to the cultural group
• Cultivate cosmopolitan outlook & attitudes
25

26. Evaluation and reward systems are important
mechanisms for implementing strategies
Agency theory
goal incongruence
Direct monitoring of subsidiary managers
MNC’s overall objectives
importance of the subsidiary
the cultural distance
subsidiary size

27. differentiated use of IHRM functions
Use of MNC-wide reward criteria
recruitment and selection
international experience
horizontal rotations
use third country nationals
subsidiary managers’ training
international management teams
performance evaluation and reward systems

28. practical significance
Report standard deviations
degree of intra-country variation
national culture constrains
Do not equate a country effect
cultural differences
Intraclass correlation

29.  The findings of this study have reiterated the close
link between international strategic management
and IHRM. They have shown that the level of input
interdependence of overseas subsidiaries, which
increases with a move toward ITN currently
propagated in literature on international business
strategy, influences a number of IHRM functions.
 co-ordination of MNC units
 level of a subsidiary’s output interdependency
 different types of resources
 symmetry between home and host country culture
 implementing integrated network structures

30. Thanks for
Patient Hearing