HR must be knowledgeable about cross-cultural factors-on both the

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IntroductionThe workforce of the 21st century is increasingly diverse and multicultural. To effectivelymanage and lead in this environment, HR must be knowledgeable about cross-cultural factors-on both the domestic and global fronts–in human resource management. By promotingeducation in cross-cultural competencies throughout the organization, HR can better serve thecompany to successfully achieve its mission and goals.As a concept and as a reality, culture is broad and multifaceted. On a daily basis, cultureinfluences who we are–as individuals, families, communities, professions, industries,organizations and nations–and bow we interact with each other within and across regional andnational borders. Defined as a set of values and beliefs with learned behaviors shared within aparticular society, culture provides a sense of identity and belonging.( n1) From language,communication styles, history and religion to norms, values, symbolism and ways of being,"culture" is everywhere.Human resource management is the formal structure within an organization responsible for alldecisions, strategies, factors, principles, operations, practices, functions, activities and methodsrelated to the management of people.( n2)In domestic and global workplace settings, people in organizations reflect their respectivecultures. As shifting demographics bring together people of many cultural backgrounds, humanresource management (HRM) must be thoughtfully examined–and sometimes altered–to supportorganizational goals. SHRM Special Expertise Panel members point out that for sustainability,organizational leaders must expand their perspectives from a local to a worldly view.( n3)SHRM’s 2008 Workplace Forecast highlights several trends in culture that will likely have amajor impact on the workplace: 1) heightened awareness of cultural differences in domestic andglobal work places; 2) greater need for cross-cultural understanding/savvy in business settings;3) managing talent globally; 4) greater emphasis on global leadership competencies; and 5)increased use of virtual global teams.( n4)Thus, HR professionals experienced in workplace diversity and cross-cultural communicationare well-positioned to develop and implement culturally appropriate HRM strategies, policiesand practices. While not exhaustive, this Research Quarterly focuses on selected cross-culturalfactors in HRM in today’s workplace and provides insights for HR to better serve the needs ofthe organization.Business Case for Cross-Cultural HRMWith the advent of globalization, research on cross-cultural organizational behavior has becomea pathway to understand the dynamics of multicultural domestic and international workplaces.(n5) In fact, successful organizations of the 21st century require leaders who understand culturallydiverse work environments and can work effectively with different cultures that have varyingwork ethics, norms and business protocols. Yet, diverse cultures create HRM challenges. ASLisbeth Claus, Ph.D., SPHR, GPHR, associate professor of global HR at Willamette University,points out, "the HRM challenges lie between the various types of cultures–the cultures ofemerging and developed countries and the growing heterogeneity of the workforce in terms ofmulticulturalism."Gaining cross-cultural competence takes time, education, experience, openness and sensitivity.When people lack intercultural skills, miscommunications can damage business relationships,deadlines can be missed, projects may fail and talented people will go to the competition. KeyHR responsibilities are to understand how cross-cultural factors interact with HRM, be theconduit for organizational learning for cross-cultural intelligence and foster cross-culturalcommunication throughout the organization.Cultural Value DimensionsCross-cultural intelligence is the ability to switch ethnic and/or national contexts and quicklylearn new patterns of social interaction with appropriate behavioral responses. This competenceis essential to work effectively in multicultural environments. Thus, linking future career pathsand global business success with cultural competence is important for HR to emphasize, with thegoal that managers are motivated to acquire new behaviors and skills and understand the benefitsof learning from different cultures.( n6)To become culturally competent, the first step is to have a solid understanding of one’s ownvalues and how they shape cultural identity. Within this process, it is also important to realizethat different cultures often exhibit different values. Cross-cultural management researchers andtheorists (i.e., Edward Hall, Geert Hofstede and Fons Trompenaars) have developed culturalvalue dimensions, often within the realm of comparing national cultures (see Figure 1). Today,many of these terms are used to explain cross-cultural differences in the workplace.For the purpose of discussion in this article, several major cultural value dimensions are definedbelow:( n10)1) High power distance indicates that hierarchy is important.2) Uncertainty avoidance is achieved by behavior that results in fewer unforeseenconsequences.3) High-context cultures rely upon an internalized social context and/or physicalenvironment (such as body language) and face-to-face communication for all or a largepart of the message (e.g., indirect, subtle, ambiguous), whereas low-context cultures relyon direct messages (e.g., clear, stated in words, with emphasis on time management,punctuality and deadlines).4) Collectivism refers to societies in which the group is valued over the individual andthe individual’s responsibility to the group overrides the individual’s rights; individualismrefers to societies that emphasize individual achievements and rights.5) Long-term orientation indicates that cultural values are future-looking, including thrift,perseverance, humility/shame, and observe hierarchical relationships, whereas short-termorientation values look to the past, such as respecting tradition.The concept of "face" is yet another term essential for understanding cross-culturalcommunication. Face is a sense of self-respect in an interaction and may be related to socialstatus, a projected identity and/or a communication phenomenon. Facework strategies includeverbal and nonverbal cues, acts of self-preservation and management impression interaction.(n11) In Chinese society, for example, the concept of guanxi is that of personal relationships, trustand returning favors to support a network of influence.Through cultural value dimensions, HR will gain a greater awareness of miscommunication orcultural conflict that may occur in the multicultural workplace. Should these concepts be new tothe reader, the cultural factors outlined in Figure 2 offer another way to confider key culturaldifferences.Corporate and Organizational CulturesThe culture of an organization’s headquarters may highly influence the overall organizationalculture. Specific factors determine the shape of corporate culture: 1) the relationship betweenemployees and the company; 2) the hierarchical system of authority; and 3) the overall view ofemployees about the company’s future, including its mission and goals, and their respective rolesin the organization.( n12) According to cross cultural researchers and management consultantsForts Trompenaars and Charles Hampden-Turner, there is a link between corporate and nationalcultures. Organizations can be classified into four different ideal-types of corporate culture,based on their focus on tasks/relationship and the extent of hierarchy: 1) the family; 2) the EiffelTower; 3) the guided missile; and 4) the incubator.( n13) These models of corporate cultureprovide insights as to why HRM policies and programs differ.In the family model, a high-context culture, the leaders set the tone. This model gives highpriority to doing the right things rather than doing things right. Pleasing one’s superior, forexample, is considered a reward in itself. Within this corporate model, some HRM policies, suchas pay for performance, are viewed as threatening to family bonds. Countries that often use thefamily model include Japan, Italy, France and Spain. The Eiffel Tower model–contrary to thefamily model, where relationships are most important–is based on prescribed roles and functionswithin a rigid system (e.g., Germany). In this model, people are viewed as capital and cashresources. Typical HRM strategies in the Eiffel Tower culture include workforce planning madperformance appraisal systems.( n14)The guided missile model is egalitarian, impersonal and task-oriented (e.g., United States, UnitedKingdom). The focus is on achieving the end goal ("do whatever it takes"), and the value ofemployees is in how they perform and to what extent they contribute to the overall outcome. Forexample, teams serve as vehicles to accomplish goals and are disbanded once the goal is reached.HRM strategies focus on management by objective and pay for performance.( n15) At the otherend of the spectrum, the incubator model has a different philosophy, wherein the fulfillment ofindividuals is more important than the organization. The structure is egalitarian, personal andindividualistic, such as entrepreneurial firms in Silicon Valley in California and manyScandinavian companies, where the goal is innovative products or services. HRM strategiesfocus on rewards for innovation.( n16)As illustrated through these four corporate culture models, approaches to work, authority,problem solving and relationship building differ. This information provides HR with additionalinsight when working with companies of different corporate cultures.Building Business RelationshipsBuilding optimal business relationships requires global fluency. Global fluency–defined as"facility with cultural behaviors that help an organization thrive in an ever-changing globalbusiness environment"–is a competitive advantage to establish and maintain good businessrelationships.( n17) To promote people working effectively with those of other cultures, crosscultural training assists employees in becoming knowledgeable about cross culturalcommunication in terms of their own cultural values, behaviors and assumptions, and those ofother cultures. Cross-cultural communication also includes global business etiquette–fromgreeting behaviors, exchanging business cards and toasting at business dinners to work attitudes,appropriate work attire and nonverbal communication. To not cause offense, it is helpful to beaware of differences in greetings, such as the handshake.( n18) Another differing communicationstyle is the use of silence, a form of nonverbal communication. In high-context cultures, such asin Asian countries, silence indicates thoughtfulness in decision making. In contrast, people inlow-context cultures, such as the dominant culture in the United States, are uncomfortable withsilence and tend to fill the void with ‘small talk,’ such as comments about the weather.( n19)People establish rapport in accordance with their cultural values. Based on social capital theoryand the importance of social networks, a recent study explored intercultural communicationstrategies for business relationship building through interviews with business executives inChina, India, New Zealand and South Africa. The findings indicate that building a businessrelationship is defined within the socio-cultural and economic contexts of the respective culturesand that depending on the culture, different strategies are used to build and maintain businessrelationships. The following mini-case study demonstrates a success story from the viewpoint ofthe Indian culture.( n20)Mini-Case Study #1: "The Indian Story"(n21)A senior manager works at an Indian company that sells a broad array of products (groceries,liquor, durable goods) and describes his philosophy about relationship building with an examplefrom his company:"To successfully achieve our business goals, establishing and maintaining relationships withdistributors is an essential strategy. Some of our customers are large firms, managed by graduatesfrom the elite university I attended. This link creates strong networking opportunities. Once thisjan pehchan (connection) is made, it is critical to invest time in this relationship, and I alwayscounsel my subordinates on the importance of relationship building. One employee in particularis very good at maintaining relationships. He works hard to do so, even going to the airport ortrain station without prior arrangement to meet clients upon their arrival, once at 5 a.m.! Thiseffort shows that he is sincere and demonstrates how far he will go to maintain this valuablerelationship. This personalized service adds to our commitment to nurture a long-term businessrelationship."Effective cross-cultural communication is necessary to build and maintain business relationships.To support their organizations, HR professionals can develop HRM practices and policies thatpromote cross-cultural training and reward managers for their part in educating employees oneffective cross-cultural communication.The Role of LanguageToday, communicating in the global marketplace requires new perspectives and newcommunication skills. In fact, the appropriate use of language in cross-cultural settings oftendepends on the situation. Thus, when developing HRM policies, practices and initiatives, it isimportant to consider the role of language in cross-cultural environments. For example, to rollout new initiatives worldwide, it may be necessary (and often required by law) to translate HRMpolicies and programs into other languages. Colgate-Palmolive Company is an example of anorganization that has effectively communicated key HRM programs to its global workforce.Keeping in mind the different languages spoken in the firm, two critical HRM core valueinitiatives, Valuing Colgate People and Managing with Respect, were translated into 10languages. Valuing Colgate People includes a section on the company’s business ethics, code ofconduct and business practice guide lines. These initiatives set the stage for the organization’sstrategy to become a best place to work.( n22)When working with people from different cultures and/or countries, organizational leaders mustknow how to "read" body language, a key communication factor in high-context cultures.Misunderstanding body language can lead to inaccurate expectations. With many Westerncompanies now doing business with India, a good example of a common cross-culturaldifference is one of the head gestures by Indians. As cross-cultural trainer and managementconsultant Craig Storti explains, the Indian head gesture for "yes" appears similar to howWesterners shake their head to indicate "no." When seeing this gesture, Westerners may thinkthat the Indian has disagreed, when that is not necessarily so.( n23) Taking time to understandcommunication through body language can make the difference in a positive or negativeoutcome. These various points are representative of the many scenarios that require flexibilityand knowledge about language and cross-cultural communication.Finally, although the international language of business is English, not everyone speaks Englishfluently. When non native English speakers come in contact with native English speakers, theresult is often miscommunication. International English, a relatively new term, describes a modeof communication increasingly used in international business where non-native English speakersspeak English with native English speakers. International English requires the avoidance ofculturally laden language, such as cultural shortcuts, metaphors, jargon, slang and idiomaticphrases. U.S. Americans, for example, often use metaphors with sports terms, such as "all thebases are covered" or "we want a level playing field," most of which are not understood bynonnative English speakers. Interestingly, it takes time and practice for native English speakersto become proficient with the use of International English and to consciously avoid using phrasesor terms that are culturally based.( n24)Cultural Perceptions of Organizational JusticeRegarding fairness in the workplace, organizational justice is a central theme within theemployee relations domain. A fair workplace helps maintain employee commitment, contributesto job satisfaction and minimizes absenteeism and turnover. There are three broad categories oforganizational justice: 1) procedural justice (fairness of methods used); 2) interactional justice(the quality of treatment); and 3) distributive justice (perception of process and fairness of theoutcome).In a culturally diverse workforce, perceptions of justice may vary due to cultural values. A recentstudy examined cultural factors that influence bow employees form overall justice perceptions inthe United States, China, Korea and Japan. The study examined employee reactions in industrysectors such as finance, education, service, information technology and manufacturing.According to the study, the effect of perception of fairness on turnover is greater for Americansthan for Chinese or Koreans. Americans are more likely to leave their organization as a result ofperceived organizational injustice than are Japanese, Chinese or Korean employees.( n25) Yet,not all studies point to differences regarding justice based on country culture. The results of onestudy suggest that cultural dimensions should not be used as a generalization. This studyconsidered whether individualist (low power distance) or collectivist dimensions (high powerdistance) had the most impact on organizational justice perceptions regarding employee workoutcome relationships at a multinational bank with Hung Kong Chinese and Americanemployees. While employees from low power distance cultures were more influenced towardperceived justice, a key finding was that the perceptions of fairness were important to bothgroups. This study suggests that for managing in different cultures, workplace justice and itscorresponding positive effects are important, no matter a country’s cultural values.( n26)Turnover is another key aspect related to organizational justice. In an increasingly diverseworkforce, turnover due to unfairness in the workplace is very costly. While research ondomestic and cross-cultural issues in relation to fairness in the workplace is relatively new,studies demonstrate how insensitivity can damage work relations and result in increasedremover. A recent study of U.S. employees found that more than 2 million managers andprofessionals leave their jobs as a result of inappropriate and insensitive comments in theirorganizations, costing U.S. employers $64 billion annually. The study highlights that illegaldiscrimination is no longer the greatest threat when it comes to attracting, recruiting andretaining talent. Rather, every-day inappropriate behaviors are the root came of losing talentedemployees.( n27) By ensuring that HRM policies and practices–including consequences forinappropriate behaviors in the workplace–are fair, consistently applied and culturallyappropriate, HR can create a work environment that fosters respect, employee commitment andcontribution. However, it should be noted that not all localized policies and practices may beconsistent with corporate policies.Cross-Cultural Decision-MakingDecisions in the workplace are influenced by cultural viewpoints, beliefs, assumptions andvalues. Cultural values have an impact on why and how decisions are made and implemented.Although cross-cultural decision-making is rarely a topic of discussion, this information providesvaluable insight for HR to improve communication in the workplace. Figure 3 illustrates culturalvariations involved in decision-making, based on questions such as 1) do managers of differentcultures view problems in similar ways; 2) do they seek out similar kinds of information toinvestigate problems; 3) do they come up with similar solutions; 4) are different strategies usedto determine alternatives; and 5) do they implement their decisions in similar ways.( n28)Culturally influenced decision-making can be seen in various aspects of HRM. Changemanagement is one example where culture influences decision-making. In a culture that isfuture-oriented, such as the United States, with strongly held beliefs about people’s ability tolearn and change, HR. creates change management programs with the goal to be more productiveand efficient in serving internal and external customers (e.g., employee training programs on newtechnology). In contrast, in a company with a hierarchical management style–common in Japan,for example–where major decisions are made by a senior-level manager, HR would be unlikelyto promote a program that emphasizes team decision-making.Whether in a domestic or global workplace, HR needs to be cognizant of cross-cultural decisionmaking and the corresponding influence on HRM. By being aware of cultural differences in thedecision-making process (e.g., the reasons for making decisions, the various ways that decisionsare made in different cultures, the party responsible for making those decisions–individuals,groups, various levels within the organization–and the ways decisions are implemented), HR canbetter gauge culturally appropriate decisions and work with managers of other cultures in thedecision-making process.Cross-Cultural Performance FeedbackLack of cross-cultural sensitivity in the performance appraisal process can result in negativeimpact on communication, employee morale, teamwork and turnover. It is critical that managersbe culturally appropriate when assessing performance and delivering feedback. Additionally, toget better performance results in culturally diverse employee populations, companies may needto reexamine and redefine their performance standards to ensure cultural bias does not influencethe performance appraisal process.( n29) However, as the literature shows, performancemanagement is originally a Western practice. When coming from an international perspective,there are complexities primarily due to cultural and structural constructs that may not directlymatch the Western use of performance management.( n30)Researchers Philip Harris and Robert Moran point out that at the cross-cultural level, howperformance is defined and judged is "culture bound." In an individualistic society, such as theUnited States, performance is judged on productivity, timeliness, quality of output, job-specificknowledge and proficiency, with emphasis placed on individual and work outcomes, not on thegroup and work process.( n31) At the same time, culture influences the communication ofperformance feedback. In a collectivist or high-context culture, such as India and Japan, wherein-group harmony and interpersonal relationships are highly valued, it is recommended to givefeedback in a manner that is subtle, indirect and non-confrontational. Researchers suggest thatfor certain feedback processes, such as 360-degree feedback, which involves explicit feedback,employees be trained to understand and utilize such feedback, particularly if it does not matchtheir cultural orientation of communication.( n32) Presented by authors Milliman, Taylor andCzaplewski, the following mini-case study illustrates a critical incident in which culturaldifferences in the performance feedback process contributed to an unexpected response. Thissituation is an example of one that may commonly occur without cross-cultural training abouthow feedback is perceived and received in different cultural contexts.( n33)Mini-Case Study #2: Cross-Cultural Performance Feedback(n34)Fred, a team leader in software engineering at a U.S.-based multinational enterprise, leads avirtual work group. His team is working on a new product and is under pressure to meet qualitystandards and get the product to the marketplace. Some of his team members are located inMalaysia. Since the team was provided with technology for global communications, such aselectronic group software and teleconferencing, the company did not provide cross-culturaltraining. Fred writes an e-mall to his counterpart team leader, Hisham, in Malaysia to inform himthat the testing process must end and the next phase of the project must now go forward. Hishamdoes not respond to Fred’s e-mail for many days, and the Malaysian team continues to do testingon the product. For the final stage of the project, Fred flies to Malaysia. Two weeks after the U.S.deadline has passed, the project is success…

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