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7/30/2019 Global Human Capital

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Global Human Capital – Understanding Cultural Dynamics and Cross-Cultural

Communication

Global Human Capital – Understanding Cultural Dynamics and Cross-Cultural

Communication

Introduction

We all belong to an entire collection of cultures, which includes, national cultures, subcultures

(based on regions, tribes etc), organizational or corporate cultures, industry cultures, professional

or functional cultures. For that reason, culture can be defined as a shared system of values,

beliefs, and attitudes. It affects our own actions and the way we distinguish the actions of others.

Culture is not a product of a single individual‟s personality, nor does it usually change

significantly from one generation to the next.

Various descriptions have been used to portray the process of understanding various layers of

culture:

1) Culture is an iceberg, of which we see only the visible tip, also called as explicit culture.

Explicit culture represented by artifacts and products, such as language, food, artistic expression,

behavior and lifestyle (pace, public display of emotions, noise, physical contact, work ethics etc).

2) Culture is an onion, with layers that must be peeled away to reach the core of implicit

culture, the universal truths of the culture.

3) Culture is a mirror image, in which the values (what we would like to do, how we would

prefer to see ourselves) and norms (what we know we should do) are not same but are transposedand sometimes opposite.

To be successful within an organization and in all societies in which the global organization

operates HR professionals must understand the complication of culture and the probable effect of

cultural forces on the execution of global strategies and the development of local tactical HR

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practices. Being global requires an act of imagination – being able to see the view from inside

another person‟s culture and using that consciousness to create solutions and bridges.

There may be multiple types of culture in a global organization and the distances between these

cultures can create conflicts that will impede with the organization‟s ability to execute its globalstrategic plan. In this write-up we will try to understand various types of culture, analyze the

research work done in this domain and effect of various cultures within team.

Complexities involved in Cross-Cultural Communication

The main and most important key to effectual cross-cultural communication is knowledge. It is

extremely essential that people understand the probable problems of cross-cultural

communication, and makes a huge cognizant effort to overcome these problems. Also, it is

important to assume that one‟s efforts will not always be successful, and adjust one‟s behavior aptly.

A lot of people always assume that there is a momentous possibility that cultural differences are

the cause of communication problems. They should always be willing to be tolerant and

pardoning, rather than intimidating and hostile, if problems develop. One should respond bit by

bit and cautiously in cross-cultural exchanges, not jumping to the conclusion that you know what

is being thought and said.

William Ury in his paper advised that in case of any heated divergence one should stop, listen,

and think, or as he puts it "go to the balcony" when the situation gets stressed. By this he means

to withdraw from the situation, step back, and reflect on what is going on before you act. This

helps in cross cultural communication as well. When things seem to be going faultily, stop or

slow down and think. What could be going on here? Is it possible I misinterpreted what they

said, or they misinterpreted me? Often delusion is the source of the crisis.

Reflective Listening is one of the key ingredients in cross-cultural communication. Reflective

Listening is used a lot to check out the meaning of what someone says – by repeating back what

you think you have heard. You are then able to substantiate that you understand what has been

said accurately. This is as helpful as many times words and even gestures are used differently

between languages or cultural groups.

Often mediators who are familiar with both cultures can be cooperative in cross-cultural

communication situations. They can help in translating both the matter and the way of what is

said. For instance, they can tone down strong statements that would be considered unsuitable in

one culture but not in another, before they are shared with people from a culture that does not



talk together in such a strong way. They can also correct the timing of what is said and what does

it implies. Some cultures move quickly to the reference or direct to the subject; others talk about

other things long enough to set up rapport or a relationship with the other person. If discussion

on the principal topic begins too soon, the group that needs a "warm up" first will feel

uncomfortable. A mediator or intermediary who understands this can give details about problem,

and make apt procedural adjustments.

Sometimes mediators can also make the communication a bit more difficult. If a mediator is the

same culture or nationality as one of the disputants, but not the other, this gives the facade of

prejudice, even when none exists. Even when prejudice is not intended, it is common for

mediators to be more sympathetic or more understanding of the person who is of his or her own

culture, simply because they understand them better. Yet when the mediator is of a third cultural

group, the prospective for cross-cultural misunderstandings increases further. In such cases

engaging in extra discussions about the process and the manner of carrying out the discussions is

appropriate, as is extra time for confirming and re-confirming understandings at every step in the

conversation or negotiation process.

Types of Cultures – Classifications by Geert Hofstede and Trompenaars' and Hampden-

Turner's

Geert Hofstede’s Dimensions of Culture

Geert Hofstede defined national culture as the set of collective beliefs and values that distinguish

people of one nationality from those of another. In his original work, Hofstede identified four

important dimensions in national culture:

1) Uncertainty Avoidance

2) Power Distance

3) Individualism versus Collectivism

4) Masculinity versus Femininity

Later he added another cultural dimension, “Confucian dynamism”, which captures the

difference between a long-term and short-term orientation.

1) Uncertainty Avoidance

This dimension refers to the extent to which people feel comfortable when they are exposed to an

ambiguous or uncertain situation. People in a low uncertainty avoidance society are more willing

to take risks and appreciate flexibility and informality in the workplace. On the contrary, people

in a high uncertainty avoidance society tend to be risk averse and favor rigid formal decision-

making processes in the workplace.

Under high uncertainty avoidance:



a) Security is a strong motivator relative to achievement or self-fulfillment.

b) Order and predictability are paramount.

c) Rules are important and must be obeyed to avoid chaos.

d) Communication is direct and unequivocal to avoid confusion (Often this directness in high

uncertainty avoidance countries is mistaken for rudeness).

In low uncertainty avoidance societies, managers are allowed to exercise more latitude and

discretion in their decision making rather than relying on rigid internal rules and regulations.

Countries that exhibits the culture of high uncertainty avoidance: Germany, Spain, Portugal,

Turkey, South Korea, Greece, Portugal, Latin America, Belgium, Japan, France

Countries that exhibits the culture of low uncertainty avoidance: the United States,

Malaysia, India, the United Kingdom, Singapore, Denmark, Sweden, Hong Kong

From Organization’s Perspective –

A) Impact on Manager: A compensation specialist advises a Singapore company to adopt a

different compensation plan for its sales force in Japan. Unlike the home sales force, which has

low base pay and high commissions, the Japanese sales representatives will receive high base

pay and lower commissions.

B) Impact on Managed: Before beginning a project, a French employee of a global non-profit

organization asks copious questions to ensure perfect understanding of the manager‟sexpectations.

Impact on Compensation Policies and Practices –

In countries that are Low on uncertainty avoidance, one can find Performance-based (at risk)

pay; external equity focus; flexibility; broad salary banding (few pay grades). On the other side,

countries that are high on uncertainty avoidance shows limited use of performance-based pay;

pay consistency and predictability.

2) Power Distance

Power distance refers to the extent that people have an equal distribution of power.

In a large power distance culture, power is concentrated at the top in the hands of relatively few

people whereas people at the bottom are subject to decisions and instructions given by superiors.

Conversely, in a small power distance culture, power is equally distributed among the members

of the society. It is important to note that the particular predominant perspective on power

distance is held and reinforced by most members of the society.

Managers in high power distance societies tend to believe in giving subordinates detailed

instructions with little room for interpretation. Subordinates are supposed to respect the authority

and superiority of upper management.

The “mechanistic characteristics” of high power distance cultures, such as



a) inequality among the members in the society,

b) lack of free communication across different levels of the hierarchy, and

c) centralized control

…can stifle employee creativity and new ideas.

On the contrary, the “organic characteristics” of low power distance cultures, such as a) lack of hierarchical authority, and

b) less centralization

…tends to promote employee interaction, lateral communication and less emphasis on the rules.

Countries that exhibit the culture of high power distance: Malaysia, Latin America, Middle

East, China, Mexico, Panama, Indonesia, and India

Countries that exhibit the culture of low power distance: Austria, Australia, New Zealand,

Ireland, Denmark, Israel, Scandinavian Countries, the United Kingdom, and the United States

From Organization’s Perspective – A) Impact on Manager: Two headquarters‟ managers demonstrate the effects of their cultures.

A Saudi manager remains aloof from subordinates, tends to retain significant projects rather than

delegating them and expects subordinates to step forward quickly to assume blame when things

go wrong. On the other hand, a Danish manager enjoys sharing assignments and credit with

subordinates but always assumes blame for any problems.

B) Impact on Managed: A British training specialist goes to work for a Malaysian domestic

company. He cannot understand why his attempts to offer suggestions are coldly received and

why he is receiving poor performance reviews.


In countries or cultures that emphasizes on low power distance, one can observe employee

participation and involvement in reward determination and distribution techniques; profit

sharing; gain sharing etc. On the other hand, in cultures with where high power distance

dominates, no employee participation/involvement will be noted. One can note status distinctions

reinforced by pay and rewards.

3) Individualism versus collectivism

Individualism means that people seek and protect their own interests over the common goal of

the society and their role in the society.

In an individualist culture, people are comfortable with having the authority to make a decision

based on what the individual thinks is best. On the other hand, in collectivistic culture, people

tend to belong to groups and look after each other in exchange for loyalty.

a) In individualistic societies, employees are provided with a great deal of personal freedom and



autonomy. On the other hand, collective cultures do not usually allow the same amount of

freedom and independence necessary for organizational members to think creatively and thereby,

fail to cultivate an environment that fosters an innovative spirit.

b) While an individualist culture tends to emphasize individual merit or achievement,

collectivistic culture measures contributions to teamwork and group achievement.

c) Collective cultures put a great deal of pressure on their members to conform to one anotherwithout their being aware of it. The overwhelming and unconscious pressure for conformity and

uniformity in collective cultures does not cultivate an environment for diversity and provides less

room for people to deviate from established norms, thus impeding the innovation process.

Countries that exhibit individualism culture: Sweden, the United States, Canada, the United

Kingdom, Australia, France, Italy, Netherlands, Italy, Belgium

Countries that exhibit collectivism culture: Ecuador, Colombia, Hong Kong, Latin America,

Taiwan, Pakistan, Indonesia, South Korea, China

From Organization’s Perspective – A) Impact on Manager: A U.S. manager in a Latin American country plans to promote an

individual based on her work on an important project. Other managers explain that they use a

broader range of factors in this decision, including evidence of loyalty.

B) Impact on Managed: The performance of a South Korean sales force improves dramatically

when incentives are changed from individual rewards to team bonuses.


In collectivism cultures, companies should emphasize on group-based contingent rewards; non-

economic rewards that satisfy recognition needs with minimal individual distinction. In

individualistic cultures, companies pay more attention on individual-based contingent rewards;

individual praise and recognition.

4) Masculinity versus Femininity

Masculine Culture

Characteristics of masculine culture:

a) A masculine culture is basically a performance-driven society where rewards and recognition

for performance are the primary motivational factors for achievement.

b) In masculine cultures some major innovations are simply the outcome of financial rewards,

prestige and a sense of accomplishment.

c) In societies that are dominated by masculine culture, people are supposed to be competitive,

ambitious, and assertive and risk taking, in order to achieve their goals. This type of culture tends

to give the utmost respect and admiration to the successful achiever who fulfills his or her

ambition and demonstrates assertiveness and willingness to take risks in order to achieve goals.

Feminine Culture



Characteristics of feminine culture:

a) In feminine cultures, people tend to emphasize the quality of the “whole” life rather than

money, success and social status, which are easier to quantify.

b) Organizations with a feminine culture are not as competitive as those with a masculine

culture, because the former places higher priority on concern for others and little distinction is

made between men and women in the same position.

Countries that exhibit Masculine culture: Switzerland, the United States, the United Kingdom,

Mexico, Germany, Japan, Slovakia, Hungary, Austria, Venezuela, Italy

Countries that exhibit Feminine culture: Denmark, Finland, Norway, Sweden, Scandinavian

Countries, Netherlands, Chile, Thailand


A) Impact on Manager: A Swedish company promotes employee development practices such

as coaching and mentoring that emphasize providing empathy and support. A manager in Japan

has trouble performing this part of job.B) Impact on Managed: An HR department in Austria has been instructed by its Danish

headquarters to implement a new work-life balance program. They try, but the program is not

well accepted or implemented locally.


In companies that exhibit feminine culture, one can note that strong emphasis being placed on

social benefits; quality of work life; work-life balance; job security; emphasis on sharing versus

competing for rewards. Masculine cultures emphasizes on performance-based pay; competition

in pay, promotion and recognition.

5) Confucian Dynamism (or long-term versus short-term orientation)

Using a different survey instrument called the “Chinese Value Survey (CVS), Hofstede and

Bond identified a new cultural dimension, “long-term verses short-term orientation”. In their

analysis they found that societies with long-term orientation show following characteristics:

a) Adaption of tradition to the modern context

b) High savings ratio driven by thrift

c) Patience and perseverance toward slow results and

d) Concern with respecting the demand of virtue

On the other hand, societies with short-term orientations exhibit the following characteristics:

a) Respect for traditions

b) Lower savings rates

c) Quick result orientation, and

d) Concern with possessing the truth

Confucian dynamism may reflect a society‟s search for virtue rather than truth. Along with the



different proclivity toward uncertainty avoidance, short-term versus long-term orientation also

has been identified as a main source of conflict resulting in decreased performance in

international joint-ventures.

Countries that exhibit long-term orientation: China, Japan, South Korea, Brazil, India

Countries that exhibit short-term orientation: West Africa, Philippines, Norway, the UnitedKingdom, the United States


A) Impact on Manager: A Chinese manager faced with promoting one of two Nigerian

supervisors chooses the one with the most tenure and best work attendance.

B) Impact on Managed: A Nigerian supervisor cannot understand why he‟s been passed over

for promotion in his Chinese-owned company, though he is well placed in this community and

has given his manager appropriate gifts.

Trompenaars' and Hampden-Turner's cultural factors

Adopting Parson‟s five relational orientations as their starting point, Trompenaar and Hampden-

Turner identified SEVEN important cultural dimensions. They viewed culture mainly as the way

in which a group of people solves problems and reconciles dilemmas.

1) Universalism versus Particularism

Universalism is a belief that there exists only a single management principle that should be

applied to all situations. People from universalistic cultures tend to believe that their way of

doing business or managing people is the universal one and the best way and therefore should be

adopted by all other countries. Conversely, particularistic cultures highlight the peculiarity and

distinctiveness of a country‟s culture that is different from those of other countries. Both at a

country and individual levels, the emphasis is on building long-term relationships and being

sensitive and responsive to the unique circumstances surrounding that relationship.

Some characteristic features:

a) Unlike people in a universalistic culture, people in a particularistic culture assume that local

circumstances determine the way of doing business in different countries.

b) People from universalistic cultures also tend to believe in absolute justice and truth and extend

great resources to their protection.

c) Those high in universalism take moral principles very seriously because they recognize the

existence of a unified approach to business. In contrast, people in particularistic cultures tend to

interpret justice or moral convictions in a more flexible manner, depending on the local and

current circumstances.

Countries that exhibit universalistic cultures: Switzerland, Canada, the United States, the

United Kingdom, Sweden

Countries that exhibit particularistic cultures: Venezuela, Korea, Russia, China, Portugal




A) Impact on Manager: A Swiss manager insists that an employee be fired for absenteeism,

although the employee has been caring for sick parents and has been making up for absences by

working extra hours at home.B) Impact on Managed: An HR manager in Venezuela has been interpreting the U.S. parent

company‟s rules flexibly to accommodate local culture but now faces a negative performance

review by headquarters senior managers.

2) Specific versus Diffuse Cultures

In specific cultures, people clearly separate public space from private space. Furthermore, in

specific cultures the size of public space is relatively large compare to private or personal space

and is greatly compartmentalized. In other words, people in a specific culture tend to be very

friendly and willing to open their public space to other people with whom they do not have an

acquaintance and admit them into a segregated compartment with a limited personalcommitment. On the contrary, in diffuse cultures, the distinction between private and public

spaces is rather unclear and blurry. Everything is related and business is just another form of

social interaction. Business relationships are expected to be enduring and spill over into personal

relationships and vice versa.

Some characteristic features:

a) Specific cultures tend to compartmentalize public and private life into separate roles, where

one role does not influence another. However, in a diffuse culture roles tend to extend beyond

their official boundaries. It is no wonder that diffuse cultures tend to have greater difficulty with

role confusion.

b) For diffuse cultures the size of public space is almost equal to that of private space. Therefore,

in diffuse cultures, people tend to reserve even their public space for those whom they are

familiar with, because accepting the entry of unknown people could also mean the uncomfortable

opening of their private space.

Countries that exhibit specific cultures: Sweden, Netherlands, the United Kingdom, Canada

Countries that exhibit diffuse cultures: China, Nigeria, Kuwait, and Singapore


A) Impact on Manager: A manager of a Venezuelan energy company is cool to a young

employee‟s request for mentorship until a common friend makes the request. B) Impact on Managed: A British manager brought in to work for a Singapore MNC may have

hurt his advancement by repeatedly evading the boss‟s invitations to social gathering in favor of

spending time with other expatriates.

3) Achievement versus Ascription Cultures

Achievement cultures value personal competency and an outcome resulting from individual hard

work. What matters most in an achievement culture is an objective track record of individual

accomplishment. In contrast, an ascription culture means that people are conferred a certain



status based on specific characteristics such as title, position, age and profession. People in an

ascription culture value personal connections and family background more than the individual‟s

qualifications. They expect those in authority to act in accordance with the roles ascribed to them

by fate or a divine power; actual performance and results are less important. Appearance

accorded by title and status is more important than substance driven by individual qualification.

In an ascription culture, a high-trust relationship is based on membership of a common family,

province or class of graduates. These represent preexisting relationships.

Countries that exhibit achievement cultures: the United States, Australia, Canada, the United

Kingdom, Netherlands

Countries that exhibit ascription cultures: Egypt, Argentina, Czech Republic, Korea, Poland


A) Impact on Manager: A British manager supervising a Czech office senses hostility among

the office employees after promoting a young worker. They obviously disagreed with the choice.

B) Impact on Managed: An ambitious young Australian who has struggled to educate and

establish herself is baffled by her Egyptian managers, who seem more impressed with theconnections of her Egyptian team members than with her achievements.

4) Individualism versus Communitarianism

Individualism refers to the culture that emphasizes the interests of self or of his/her own

immediate family. Individualism is about the rights of the individual. It seeks to let each person

grow or fail on their own, and sees group-focus as denuding the individual of their inalienable

rights.

In contrast, communitarianism, a synonym for collectivism, emphasis group interests before

individual interests and seeking group consensus in decision making. It seeks to put the family,

group, company and country before the individual. It sees individualism as selfish and short-

sighted.

Countries that exhibits individualistic cultures: Israel, Canada, the United States, Denmark

Countries that exhibits communitarian cultures: Egypt, Mexico, India, Japan, France


A) Impact on Manager: A Japanese team leader has trouble creating harmony within a global

design team composed of Americans and Mexicans.

B) Impact on Managed: An Indian employee assigned to a Canadian office is perplexed by the

competition among project teams that the office‟s managers try to create.

5) Affective versus Neutral Culture

People in affective or emotional cultures are not hesitant to reveal their innermost feelings

whereas people in neutral cultures tend to control their emotions carefully and maintain their

composure.



People in neutral cultures may consider the behaviors of people from affective cultures

immature; people from affective cultures may view the stoic behaviors of people from neutral

cultures as insincere and deceiving. This perception may cause problems during cross-cultural

negotiations between managers from affective and neutral cultures.

Countries that exhibits neutral cultures: Ethiopia, Japan, Hong Kong, China, India

Countries that exhibits affective cultures: Kuwait, Egypt, Spain, Russia, Argentina


A) Impact on Manager: A Spanish manager of a Japanese electronics subsidiary is corrected

gently by visiting Japanese managers for expressing anger at a violation of clean-room rules.

B) Impact on Managed: A Russian international assignee working for a Hong Kong real estate

firm is convinced that her manager doesn‟t like her. Her manager never seems open or relaxedwhen meeting with her.

6) Time as sequence vs. Time as synchronization

A mono-chronic, or sequential, approach to time means that people use time in a linear way.

Time is perceived as being a tangible asset almost like money. In this type of culture, punctuality

is a virtue and people need to always keep schedules. At the same time, they tend to make a clear

distinction between work and pleasure. People may be relaxed only during their leisure time,

while they concentrate on assigned tasks only during working hours.

In contrast, a poly-chronic, or a synchronous, approach to time suggests that people use time in a

circular way. People in this cultures tend to have a more flexible view about time and can handle

multiple agendas at the same time. They also consider that maintaining human relations is more

important than keeping schedules. Accordingly, they do not clearly separate their work from

pleasure and do not mind mixing them.

Countries that exhibit sequential cultures: the United States, Japan, Netherlands

Countries that exhibit synchronic cultures: France, Spain, Belgium


A) Impact on Manager: A Japanese project team leader is irritated and doesn‟t know what to dowith a French team member who is continually late to team meetings.

B) Impact on Managed: A Belgian work unit thinks it‟s unreasonable and arrogant when the

U.S. headquarters cancels a traditional social ritual in order to meet a looming deadline.

7) Inner-directed versus Outer-directed

This cultural dimension concerns how people in a society orient themselves to nature. First,

people can think that human beings are supposed to dominate nature. Second, some people

believe that they need to live in harmony with nature. A third and final orientation toward nature

is a sense of subjugation to nature. In other words, human being cannot and should not master

nature because a Supreme Being or supernatural force is supposed to govern individual fate and

destiny.



Inner-directed (or also called as future oriented culture) is about thinking and personal judgment,

„in our heads‟. It assumes that thinking is the most powerful tool and that considered ideas and

intuitive approaches are the best way. People in this culture tend to believe that they can improve

their situations and even influence nature as a result of their own actions and ideas.

In contrast, Outer-directed (or also called as past oriented culture) is seeking data in the outer

world. It assumes that we live in the 'real world' and that is where we should look for our

information and decisions. People in this culture do not believe that individual actions and ideas

can change the will of a supreme being, who is supposed to decree what will happen in future.

Countries that exhibit inner-directed cultures: Israel, Norway, the United States, the United

Kingdom, France

Countries that exhibit outer-directed cultures: Venezuela, China, Russia, Kuwait, Singapore


A) Impact on Manager: A British company has outsourced design of a component to a Russian

firm. The British expect a design that ensures top performance across the full range of criteriaand the latest technology. The Russians argue that the British should think more about what their

end customers really require.

B) Impact on Managed: A Norwegian employee assumes that if he works hard enough, he will

be rewarded with a promotion.

Conclusion

Understanding cultural differences is critical for the success of an organization in global arena

because there are roles played by culture that influences talent management strategies and

practices at workplace. In this write-up we have examined several important dimensions of

various cultures for gaining insights and understanding the cultures of employees that staff our

organizations domestically and overseas. We hope that this write-up will be of some use to HR

professionals that are managing and developing talents at global stage.

References –

1. International Human Resource Management – A Multinational Company Perspective, By –

Monir H. Tayeb

2. Aligning Human Resources and Business Strategy, By – Linda Holbeche

3. Managing a Global Workforce, By – Charles M. Vance and Yongsun Paik

About Author: Sanjeev Himachali is a HR professional with 10+ years of experience in various

domains of HR, such as, Global Talent Acquisition, Performance Management System, Global

Talent Mobility, Compensation and Benefits and Green Field Operations. His professional

profile can be

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