Recruitment and Selection the Hofstede Model
Employees are sent to international assignments for one or more reasons: 1. to fill positions for which host country employees are judged to be unsuitable 2. for reasons of management development; and 3. for reasons of organisational development Sometimes the first involves the intention of the organisation to maximise management control and coordination. The second is often cited in terms of giving the manager international experience before promotion within the firm in the home country.
The third is more diffuse, involving a general internationalisation of the organisation and building of networks of relationships across countries and cultures. Sending an employee to another country to manage an organisation’s operations has become a complicated process, typically requiring sophisticated understanding and complicated procedures. For the organisation, and for the individual manager, the stakes can be surprisingly high.
Why this should be so, and what companies are reported as doing about it in the quest to optimise performance, warrants examination. Learning objectives After studying this module, you should: • be able to understand the dimensions of expatriate assignment success and failure, and their consequences for expatriate selection • be able to use this knowledge as a basis for understanding expatriate selection Selecting the expatriate On the whole, the replacement of expatriates with host country nationals (HCNs) has been seen as a positive trend …
In the short run it is easier to train and promote host and third country nationals than it is to select high potential candidates and expend the resources necessary to give them the attitudes and cultural skills they need to function effectively abroad (Kobrin 1988). Research has recently suggested that the high failure rate of expatriates on international assignment, and the subsequent difficulties and financial expense of repatriating these managers, has made the alternative of employing host-country managers more attractive to multinational companies.
A 1983 survey by Kobrin (1988) reported that 80 percent of U. S. firms employed a local national as head of a majority of country operations (Kobrin 1988). The Asian currency crisis of 1998 accelerated the move by many companies employing expatriates to establish policies for the preferential hiring of host-country nationals over expatriates, wherever possible. For example, some Sheraton hotels in Asia (especially in Malaysia) have a notional limit of two expatriates per property. The reason given is that expatriates are too expensive to appoint.
A further argument cited by some host countries is that expatriates deny their own people the essential jobs and training they need, and some critics have suggested that ‘the expatriate’ is still seen in certain countries as a historical throw-back to the privileged and frequently racist elite of colonial times. If there is a strong feeling of nationalism in the host country, having home country nationals as managers can make the subsidiary seem very foreign indeed (Ball & McCulloch 1996).
In spite of all the reasons to the contrary, the evidence is that many companies still prefer to expatriate their own home-country managers to run their international operations, at least in the early stages of the operations. One reason commonly given is that the parent company prefers to have someone in the job that it knows and who knows the headquarters way of doing things, in addition to having someone who is demonstrably skilled and knowledgeable about the technical aspects of the job.
Another reason given relates to the perceived need for the development of managers from the parent company, through international assignments. There is every indication that a detailed examination of the trends in this area of International HRM practice is required. Expatriate ‘failure’ As business becomes globalised, many more Australian companies than ever before are sending staff to overseas postings. The evidence from American and European studies indicates that this is both expensive and risky (Bartlett et. al 1990; Black et. l 1991; Brewster & Larsen 1992). The magnitude of the problem being faced by many international organisations can be grasped from the number of expatriate assignments judged to have failed (Shilling 1993). With national variations, it has been estimated that twenty to fifty percent of personnel sent abroad return prematurely from their overseas assignment (Distefano & Lane 1992). Further, as many as 50 percent of expatriates who do not return prematurely function at a low level of effectiveness (Black & Mendenhall 1990).
These are presumably the result of selection errors, or of ineffective management policies and/or practices. Such failure is usually described in the research literature as ‘expatriate retention failure’, in terms of high levels of early returns of expatriates, either through recalls by companies or through the manager’s voluntary early departure from the assignment, and in terms of ineffective or suboptimal performance of expatriates (Baker & Ivancevich 1971; Black et. al 1991; Copeland & Griggs 1985; Misa & Fabricatore 1979; Tung 1982; Nicholson et. l 1990). There seems to be general consensus that human resource managers in organisations with expatriate staff have a responsibility to determine what causes failure, and what expatriate needs might be provided for in order to optimally support the expatriate on assignment. Expatriates ‘fail’ in their assignments for reasons which may have at least as much to do with personal adjustment difficulties, and with the personal difficulties of the spouse and family in particular, as with deficiencies in technical competence.
Such specifically job-related expertise aside, the logical question concerns what can be done about enhancing personal adjustment through selection, preparation and support. Expatriate adjustment Organisations have an obvious vested interest in assisting their expatriates to adjust to their environments as quickly and effectively as possible. Much can be learned from studies of personal relocation, of which expatriation is a special case.
These are proposed as among the factors which may be important for the adjustment of the expatriate. A six-month sideways transfer, alone, to an unknown, less developed, and distant country where language, customs, and climate are arduous, is likely to be a very different experience from a sojourn in a pleasant country with similar language and customs, accompanied by one’s spouse and children. Expatriate couples and families
There is now strong research literature in regard to dual-career couples, defined as ‘two people in a marital or other significant relationship, where both partners display a high degree of commitment to their respective work roles’ (Pierce & Delahaye 1996, p. 905). The ‘morbidity’ for dual career couples and families related to international relocation is reputedly high (Hamill 1989). Coyle’s Australian study reported that 52 percent of spouses suffered increased physical symptoms of stress after moving, and 28 percent reported a decline in health (Coyle 1988).
Worries about ‘loss of social contacts’ and ‘problems with family property’ figured importantly in relocations, along with ‘problems of spousal employment’ and ‘worries about children’s educational needs’ (Munton & Forster 1990, pp. 75–81). Additional complications arise in the case of the children in expatriate families; teenagers with strong peer-dependence may simply refuse to relocate. Children of expatriates are often expected to be less involved with friends, and they tend to spend their leisure time alone (Brett 1982).
They are also required to develop the skills of making and unmaking social friendships quickly and without undue stress. With the expatriate working long hours and often away from the home, the spouse and family may see little of him or her. The spouse is thus forced to deal with domestic crises alone, usually in a strange land and culture, and perhaps battling with a foreign language. The nature of the expatriate experience depends on many different variables, one of which is the way in which the manager and his or her family approach it.
While the stories of distress and failure are dramatic, there are many expatriates who return from assignments they rate as highly successful, not only in terms of business criteria, but in terms of enriching their family lives and general education, to an extent that any negative aspects are more than compensated for (Stokols & Shumaker 1982, pp. 149–171). ‘I’d go back tomorrow’ is a common response from repatriates. ‘The threat and challenge of people who are different’
The inability of expatriate managers to adjust to the host culture’s social and business environment is costly in terms of management performance and the productivity in the overseas operation (Hogan & Goodson 1990). Just how successfully an expatriate adjusts to ‘the threat and challenge of people who are different’ (Jenkins 1975) is determined by a multivariate process. The need for a comprehensive consideration was pointed to by Mendenhall and Oddou (1985), in terms of four dimensions of the adjustment process in which the ability to adapt is proposed as strongly influential in the outcome of an international assignment: . The Self-oriented dimension: This is the degree to which the expatriate expresses concern for self-preservation, and is characterised by reinforcement substitution (the ability of the expatriate to substitute other reinforcements as interests in the new culture), stress reduction (the ability to cope in a foreign culture without experiencing disturbing stress), and technical competence (the mastery of the core competencies of the job to which the expatriate is assigned). 2.
The Others-oriented dimension: This identifies the expatriate’s abilities to interact effectively with host-country nationals, and is composed of the factors of relationship development (being able to form appropriate relationships with host-country nationals) and willingness to communicate (including the ability of the expatriate to communicate in the host-country’s language). Well-adjusted expatriates are likely to collect ‘conversational currency’ (anecdotes, jokes, local phrases, sporting terms, etc. which can be used to indicate a desire to understand and relate with host-country nationals. 3. The Perceptual dimension: This includes the expatriate’s ability to perceive and understand why persons from other cultures think, feel and behave as they do, and not to impose one’s own values on assessments of situations. 4. The Cultural-toughness dimension: This refers to the cultural ‘distance’ between the host country and the expatriate’s home country; how ‘tough’ the host culture is will have an effect on how well the expatriate is able to adjust to it and succeed in the assignment.
Expatriate adjustment problems thus have to do firstly with the expatriate, and what he or she brings to the international assignment, and secondly with the environment, and the various influences it has on the expatriate. How then are expatriates to be prepared for the environments they face? Indeed, what are the environments of international HRM? The ‘Hofstede model’ Dutch scholar Geert Hofstede defines cultures as ‘the collective programming of the mind that distinguishes the members of one category from another. ’ (Hofstede 1984) . Its main features are: 1.
Culture is based on a system of values about how things ought to be 2. Culture is learned and not innate 3. Culture influences the behaviour of group members to act in predictable and uniform ways 4. Culture is particular to a group 5. Culture is both explicit and implicit. In short, ‘culture is a shared system of meanings that is coherent, orderly and makes sense; the mental map that guides our relationship to our surroundings and other people’ (Burns 1998, p. 6). 1. Power Distance—the extent to which the members of a society accept that power in institutions and organisations is distributed unequally.
Larger inequalities would be acceptable in a high distance society, which would typically accord great authority to people with titles (e. g. , India, Philippines). Such societies have greater centralisation, tall organisation pyramids, and large wage differentials. The seller is subservient to the buyer, and there is less inclination to trust unknown foreigners. Trust is vital. In a lower power distance society, inequalities are played down; superiors have authority but are not revered (e. g. , Denmark; Australia is moderately low).
Such societies show less centralisation, flatter organisation pyramids, more open communication, and fewer wage differentials. They also exhibit greater welfare orientation in their economies. 2. Uncertainty Avoidance—the degree to which the members of a society feel uncomfortable with uncertainty and ambiguity, which leads them to support beliefs promising certainty and to maintain institutions protecting uniformity. Societies high in uncertainty avoidance are characterised by an increased level of anxiety in people (e. . , France, Japan), said to be manifested by nervousness, stress, and aggressiveness. Such societies have rules that seek to minimise deviate behaviour, rely on barriers in ambiguous situations, and are less given to risk-taking. Their members are said to put great value on job security, career pathing, retirement benefits, and health insurance, and prefer not to work abroad. In return they tend to be loyal and work best with clear instructions and tight controls from home country managers (Mead 1990).
Belgium is an example, where workers expect six months notice and two years’ severance pay. Low uncertainty avoidance cultures (e. g. , Denmark, USA, Great Britain; Australia is just below average) have fewer written rules, less structuring of activities, great variability, and more generalists, with greater risk-taking. Managers in low uncertainty avoidance, entrepreneurial countries such as Singapore and Hong Kong are thus required to alter their behaviour accordingly, to cope with such cultural differences. 3.
Individualism versus Collectivism—the preference for a loosely-knit social framework in society in which individuals are supposed to take care of themselves and their immediate families only, instead of forming cohesive groups for protection and support. Collectivist cultures place great value on harmonious relationships, and the company is likely to defend the employee’s interests (e. g. , Taiwan, Mexico, and Greece). Loyalty may be valued before efficiency, particularly loyalty to the family and to the work group.
This loyalty to the family (as in China) or to the workgroup (as in Japan) is not altruistic, though, as it does not extend beyond the in-group. There is little generalised charity to others. Using individualised performance appraisal and motivation techniques as in some Western societies is not always effective, for obvious reasons. The employer-employee relationship is a moral one; there is an emphasis on obligations to the group, in regard to shame, harmony, and respect for opinions predetermined by the group. Patronage is common, as a reward for loyalty, and power-distance is usually high.
By contrast, individualist cultures are more interested in maintaining an individual’s self-respect, and companies rely on individual employees to defend their own interests (e. g. , USA, Britain, and Australia). Such a dimension has clear relevance to managerial decision-making about how to motivate workers. The emphasis is on individual achievement and rights, and personal responsibility for actions. Intragroup competition is common. Tasks may be given higher priority than relationships, and there are few emotional attachments between management and workers.
Employee loyalty to the organisation may be instrumental and self-serving. Individualism correlates with low power distance. 4. Masculinity versus Femininity—‘masculinity’ is used to describe the preference for achievement, heroism, assertiveness, and material success, as opposed to ‘femininity’, which is thought to imply a preference for relationships, modesty, caring for the weak, and for quality of life. In a masculine society, even the women prefer assertiveness (at least in men); in a feminine society, even the men prefer modesty.
Countries found to be high on this scale (e. g. , Japan, Austria, Mexico, Italy; Australia is moderately high) have clearly defined sex roles, fewer women in qualified jobs, reward aggression and competition, and have organisations that interfere with individuals’ private lives. In masculine societies, leaders have great independence, and work is valued as a central life interest. Managers in such cultures usually emphasise merit-based reward practices in their efforts to gain higher organisational performance (Newman & Nollen 1996).