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In the Current Economy Why Do National Variations in Human Resource Management Offer Particular Advantages or Disadvantages?

In the current economy why do national variations in Human Resource Management offer particular advantages or disadvantages? Considering the current globalised economy companies have to deal with national variations in Human Resources Management to work effectively. That matter offers particular advantages and disadvantages. The current global economy is based on a free trade market and most of the time obeys to a capitalist model of doing business. Exchanges of goods, capital, knowledges and human resources are now established on a worldwide level.

In the same time national variations in human resources management are observable and relevant when we focus on the culture of a country. Indeed national variations can have different nature as work environment, laws and national culture and these criteria influence Human Resources Management abroad. This essay will analyse the influences of national variations in human resources management and the consequences. Firstly, we will discuss the reasons for what national variations influence Human Resources Management.

Then we will focus on the general advantages and disadvantages offered by national variations. Human Resources Management in a company is influenced by two main criteria which are the the business strategy of the company and the environment. National variations appear when we focus on the company environment. The nature of the influences of national variations on Human Resources Management can be multiple. Indeed, the environment gathers national culture, political system, national laws, markets and technology.

That means that the work environment and especially Human Resources Management have to deal with these criteria as national culture. The US has a particular national culture in his work environment which is based on individualism, masculinity, low uncertainty avoidance, a medium power distance and a short-term orientation (Hofstede, 1983). These criteria have affected professional relationships and the way of thinking in the US. Considering HRM, human resources practices have been influenced by that national culture in some extent.

On the other side the culture of European countries like Sweden for example is based on individualism, femininity, a lower uncertainty avoidance and a low power distance (Hofstede, 1983). The difference in national values between Europe and the US can explain the differences in human resources practices in order to fit with the values of the employees. The Chinese culture is based on collectivism, masculinity, a low uncertainty avoidance, high power distance and a long term orientation (Hofstede, 1983). The Chinese culture is also strongly attached to the Confucianism which Cardiff Metropolitan University ?

IBM 3, BSP 6061 ? st20011935, Valentin Fortea-Vicente ? Nov 21st 2011 1 wants to reach a social harmony with strong familial and collectivist values. The cultural differences between countries explain the adaptation of Human Resources Management to each countries, the aim of HRM is to fit in the best way to employees and reach economical objectives in the same time. Easterby-Smithy, Malina and Yuan (1995, p. 55) said “HRM appears in an extent to vary as a result of culture or context”. They highlighted some examples as the fact that (1995, p. 5) “The main differences in HRM between the two countries (China/UK), therefore, appear in the ‘softer’ areas where relationships are important: appraisal, reward systems, the process of assessing potential and the basic stance of unions towards management”. These differences can be linked to the main cultural aspect of the Chinese culture which is the Confucianism and the collectivism. Indeed, HR practices have to deal in the first place with relationships which means that they have to ensure the well-being of employees.

Chinese values prevent the use of HRM and HR practices which place relationships on the second plan. This point is relevant of the dependence of HRM to national values and way of working. Human resources mangers have to be aware of the need to considerate cultural aspects and values to work effectively. Schuler and Rogocsky (1998, p. 10) suggested, “that national culture provides an important explanation for the variance in the utilisation of different compensation practices in different countries”. This example shows the strong bond between national culture and his impact on HR practices and HRM.

The apply of specific HR practices and HRM policy has to fit the cultural values to be effective in the work environment. Considering this fact, national values have a real impact on HRM that means national variations can influence HRM policy of a company in the global economy. Considering the current economy, national variations can offer particular advantages or disadvantages. The impact of national variations can appear in four main areas of HRM which are human resources practices, management and bargaining with trade unions, level of state nvolvement in the labour world, management of relationships between employees and managers. A national value turns into a disadvantage when this value does not fit with the global economy. On the opposite, if the national value fits with the economy it can be an advantage for HRM and the business strategy of the company. A national variation between two countries becomes an advantage or disadvantage when it promotes or prevents the adaptation of the HRM policy of the company to the current economy. HR practices are in some extent adapted to national variations in order to fit employees needs. Schuler and Rogocsky explained (1998, p. 0) “that MNCs strive for greater productivity through the use of individual incentive compensation, a country’s Cardiff Metropolitan University ? IBM 3, BSP 6061 ? st20011935, Valentin Fortea-Vicente ? Nov 21st 2011 2 culture should be taken into account. More specifically, the results of the pay-forperformance study suggest that individual incentive compensation practices have a better fit in countries with higher levels of Individualism”. Here national values are used as an advantage to adapt the reward system of the company to promote the self-investment of employees in their work and this is now a tool of motivation.

National variations offer an advantage in HR practices when they allowed the application of practices which promote the health of the company on different aspect as financial, competitive and effectiveness. In most countries the bargaining with trade unions his strongly linked to the history of the country and his values. Bratton and Gold said (2004, p. 336) “The central tenet of traditional trade unionism has been the collectivist culture [… ] Such collectivist goals have resulted in trade unions strongly resisting all forms of performance appraisal based on individual merit. Social rights asked and claimed by trade unions influence highly HRM policy all over the world. Today, trade unions tend to be weaker than they were in the past and this is relevant in the US current situation regarding trade unions power. As we saw it before, the US are one of the most individualist country and trade unions are most of the time powerless in HRM policies like massive lay-off or reorganisation of the company. Here the lack of power for trade unions demonstrates a real advantage for the company in the current economy if we consider that trade unions fight for social rights before the conomical health of the company. The level of the state involvement in labour laws which is different in every countries affects also in some extent HRM. Schuler and Jackson stated (2007, p. 116) “The climate of State activity on employment describes the overall philosophy towards labour and the management of the employment relationship. It is created by laws, tax policies, social security policies and government propaganda. The economic policies and the degree of government intervention may be the crucial variables”.

Indeed, to be effective in the current economy companies need to work in an environment which insure the lowest state intervention to fit with capitalist values as globalisation and free trade market. State interventionism turns into a disadvantage for the company in HRM when the company has to obey to binding social laws which affects HRM policy. Countries with a non interventionist culture will fit easier in the current economy because companies will have the freedom to apply their own and more effective HRM policy. National variations and cultural aspects as the level of power distance by Hofstede (1983 p. 62) “this is the extent to which less powerful members of institutions and organisations within a country expect and accept that power is distributed unequally. ” are a main topic because they can turn into an advantage or disadvantage in the way of managing relationships between employees and managers. The Malaysia is the country Cardiff Metropolitan University ? IBM 3, BSP 6061 ? st20011935, Valentin Fortea-Vicente ? Nov 21st 2011 3 with the highest level of power distance according Hofstede (1983) and the Norway the one with the lower level of power distance.

The national variation which procures an advantage is the one which tends to reduce tensions between employees and managers and in the same time facilitates the communication to provide an healthy work environment. This situation is more likely observable in countries with a low power distance because employees feel closer and equal. To conclude, there is different kinds of national variations which affect and influence Human Resources Management. National variations can be a specific national culture or value, the government and his policy which is applied or the national laws as the work labour laws.

These criteria have influenced and still influence the evolution of HRM. Because of the influence of national variations in HRM, it can create advantages or disadvantages for a company in the current economy. Indeed, human resources practices which are project-oriented and business oriented, the lack of power of trade unions in collective bargaining, a weak state interventionism in the work environment and healthy relationships between employees and managers are positive elements in the current economy which are the result in some extent of national variations.

On the other side, national variations can become a disadvantage when the country uses to apply HR practices which prevent the growth of the company, when trade unions are powerful and forbid work with strikes or demonstrations, when the state involvement in work and business does not fit anymore with the current economy like protectionist or nationalist measures and when the national culture tends to oppose people or communities it will affect the work environment and its effectiveness. 1631 words Cardiff Metropolitan University ? IBM 3, BSP 6061 ? st20011935, Valentin Fortea-Vicente ?

Nov 21st 2011 4 References Bratton, J. and Gold, J. , 2003. Human resource management, third edition: theory and practice. Palgrave Macmillan. Claudius, P. , 2011. Be aware of Human Resources Current Issues as a Way of Updating Yourself on Human Resource Management. Available from: http://www. strategic-human-resource. com [Accessed 19 October 2011] Easterby-Smithy, M. , Malina, D. and Yuan, L. , 1995. How culture-sensitive is HRM? A comparative analysis of practice in Chinese and UK companies. The International Journal of Human Resource Management, 6(1). Edwards, T. and Kuruvilla, S. , 2005.

International HRM: national business systems, organizational politics and the international division of labour in MNCs. The International Journal of Human Resource Management, 16(1), pp. 1-21. Hofstede, G. , 1983. Cultural Consequences: International Differencies in Work-Related Values. Johnson Graduate School of Management, Cornell University, 28(4), pp. 625-629. Keegan, A. , Huemann, M. and Turner, J. R. , 2011. Beyond the line: exploring the HRM responsibilities of line managers, project managers and the HRM department in four project-oriented companies in the Netherlands, Austria, the UK and the USA.

The International Journal of Human Resource Management. Schuler, R. and Jackson, S. , 2007. Strategic Human Resource Management. WileyBlackwell; 2nd edition. Schuler, R. and Rogocsky, N. , 1998. Understanding Compensation Practice Variations Across Firms: The Impact of National Culture. Journal of International Business Studies, Vol. 29, 1st ed. Stiles, P. , 2009. What’s the difference? Managing people across borders. Center for International Human Resources Management Opinion Cardiff Metropolitan University ? IBM 3, BSP 6061 ? st20011935, Valentin Fortea-Vicente ? Nov 21st 2011 5

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