Multinational companies are increasingly operating in a multicultural environment as they source talent globally. This requires cultural adaptation from MNCs in how they manage subsidiaries. The document discusses various approaches to cultural management from ethnocentric to geocentric. It also summarizes cultural models like Hofstede and Globe that analyze cultural dimensions. Case studies of IBM, Cisco and Korean MNCs highlight how they are undergoing cultural changes like language training and adopting local names to better integrate their global workforce.

1. 1
International HumanInternational Human
Resources ManagementResources Management
Multiculturalism

2. 2
Culture DefinedCulture Defined
Culture is understood as the customs,
beliefs, norms and values that guide the
behavior of the people in a society and
that are passed on from one generation
to the next.

3. 3
Culture DefinedCulture Defined
Culture has a normative value
Culture is a group phenomenon
Cultural practices are passed on from
generation to generation

4. 4
Culture DefinedCulture Defined
Occupational
culture
Organizational
culture
Sub-culture
Dominant culture

5. 5
MulticulturalismMulticulturalism
 Multiculturalism means that people of different
cultures (and countries) interact regularly.
 Global firms are repositories of
multiculturalism

6. 6
Cultural predispositionsCultural predispositions
MNC’s tend to have cultural predispositions
towards managing things in a particular way
which helps identify specific steps it takes:
Ethnocentricism
Polycentricism
Regiocentricism
Geocentricism

7. 7
EthnocentricismEthnocentricism
The home country’s culture is sought to be
imposed on the subsidiaries.
Exports policies and practices from home
country to the subsidiary
Expatriates from the home country manage
the affairs
Local employees occupy low-level and routine
jobs
Decision making and operations are largely
centralized out of the home country HQ

8. 8
PolycentricismPolycentricism
The multinational adapts to the local cultural
needs of subsidiaries.
Management policy is oriented to suit local
needs
Autonomy in decision making to the subsidiary
to run their businesses
Host country nationals head the organization
supported by extensive training by the parent
company
Parent company ensures cultural parity and
corporate philosophy across all subsidiaries

9. 9
GeocentricismGeocentricism
The multinational runs the subsidiary as a
independent entity.
Localization is replaced with building a center of
excellence at a global level
Hiring the best person for the job….. could be
a third country national
Remain guided by Parent company culture and
philosophy

10. 10
RegiocentricismRegiocentricism
The multinational runs the subsidiary as a
independent entity, within a regional geography.
Localization at a regional level, building a center
of excellence at a regional level
Hiring the best person for the job….. usually a
third country national with a regional
experience
Remain guided by Parent company culture and
philosophy

11. 11
Cultural ModelsCultural Models
Three theoretical concepts that help understand
the nuances of different cultures better
GLOBE Project
Hofstede’s Cultural Dimensions
Trompenaars Framework

12. 12
Globe ProjectGlobe Project
“Global Leadership and Organizational Behavior
Effectiveness”
170 researchers, over 7 years from 17000
managers in 62 countries, covering 825
organizations
Identified nine cultural dimensions that
distinguish one society from another that have
important managerial implications

13. 13
Globe ProjectGlobe Project
“Global Leadership and Organizational Behavior Effectiveness”
Assertiveness
Future Orientation
Performance Orientations
Human Orientation
Gender differentiation
In-group collectivism
Collectivism/ Societal
Power Distance
Uncertainty Avoidance

14. 14
Hofstede’s Cultural DimensionsHofstede’s Cultural Dimensions
Based on a study of IBM employees spread
across the globe
Identified 4 critical cultural dimensions:
Power distance
Uncertainty Avoidance
Individualism
Masculinity

15. 15
Power DistancePower Distance
The extent to which less powerful members of
institutions and organizations accept that power
is distributed unequally.
Countries in which people blindly obey the
orders of supervisors have high power distance
Countries with low power distance tend to be
decentralized and have flatter structures with
more equality and decision making power

16. 16
Uncertainty AvoidanceUncertainty Avoidance
Extent to which people feel threatened by
ambiguous situations and have created beliefs
and institutions that try to avoid this.
Countries with high uncertainly avoidance have
a high need for security and a strong belief in
experts and their knowledge
Countries with low uncertainty avoidance
accept risks associated with the unknown, less
structured activities, fewer written rules, willing
to take risk, show initiative and assume
responsibility for action

17. 17
IndividualismIndividualism
Individualism is the tendency to look after
themselves and their family as opposed to
collectivism where people tend to belong to
groups and to look after each other in exchange
for loyalty
In countries with high individualism people are
responsible for themselves, individual
achievement is ideal, and self sufficiency is lauded
In countries with high collectivism group
membership is paramount, groups protect
individuals in exchange for their loyalty to the
group, societies tend to promote nepotism

18. 18
MasculinityMasculinity
Where the dominant values in a society are
success, money and other material things.
High masculine cultures distinguish clearly
between gender roles where men are
dominant and assertive and work takes
priority over other duties, and advancement
success and money are important

19. 19
Trompenaars FrameworkTrompenaars Framework
A European researcher who conducted a
research with 15,000 managers from 28
countries, representing 47 national cultures.
Uses seven dimensions to describe culture also
called the 7d cultural dimensions model
 Universalism vs. particularism
 Individualism vs. collectivism
 Specific vs. diffuse
 Neutral vs. affective
 Achievement vs. ascription
 Past vs. present
 Internal vs. external control

20. Global IT Companies On a
Cultural Make Over
 In Atos Origin India ( AOI), part of $ 6.6 billion
European IT major Atos Origin about 100 odd staff
attend French classes after office hrs.
 At IBM employees employees are being encouraged to
think in terms ofa more globally integrated orgn and tap
into a programme called “Shades of Blue” to
understand business nuances about any other country.

21. Global IT Companies On a
Cultural Make Over contd..
 At Accenture and IBM, there is a shift from a country
specific strategy to a more global sourcing one.
 Till recently IBM used to process purchase orders in
300 destinations. Now it does it in just three places –
Bangalore, Shanghai and Budapest.
 Big Blue has shifted Asia headquaters from Tokyo to
Shanghai in a bis to fanthom its new growth markets
China and India.
 Atos Origin sees a savings upwards of 50% for client
work if done from India. To take the benefit of India
sourcing, it has send a team from French car marker
Renault to AOI to bridge cultural gaps.

22. Parth Iyengar, VP Research,
Gartner India says………
 “ for multinationals, hiring staff in destinations loke India
is least of the problems. But they are not used to doing
small deals and delivering services out of low cost
destinations. This does require a cultural change in hoe
they work.”

23. The IBM Case
From doing everything from pay roll to
developing software to shipping servers
as a country specific strategy, IBM is now
going for best offshore options.
For IBM Japan the hr is done in Manila,
Pay roll in Shanghai, Procurement in
Schenzen, accounting in Kuala Lumpur,
technology support in Australia and so
on.

24. The IBM Case contd..
Its ‘shades of blue’ cultural orientation
programme is targeted towards helping
employees understand the needs of
staffers across locations easily.
The faster they do it the easier it will be
for global giants to catch up with their
smaller but more nimble competitors.

25. Cultural Make over of Korean
companies
 Koreans working for Companies like LG,
POSCO, Samsung and CISCO in India not
only learn Hindi, Kannada and Oriya but
adopt local names too.
Posco (had 35 expats working in India in
the year 2009) has made it mandatory to
learn Oriya for a better understanding of
local environment

26. Cultural Make over of Korean
companies contd…
Anurag is the name of a KOPrian Chang
Chyong Jung working at LG Greater Noida.
 “We have Korean interns who do their research
projects with us and they have even shown cultural
adaptation to the extent of adopting Indian names like
Pragya and Ashim. Some of them have also volunteered
for a Sanskrit learning course arranged by LG India .”
Yasho Verma , Director
HR & MS LG India
( LG had 20 expats in the year 2009)

27. Cisco Case
All its expats come from 4 places primarily,
Europe, Singapore, Beijing and US.
In at least two of these places the first language
is not English. Cisco has a language course of
160 hrs.
They have a 2 day orientation for employee,
spouse, and children.
They are planning to relocate over 20% of its
senior team in the next three years to its
globalization centre.

28. Cisco Case Contd..
“ The language course that we conduct , could
be a combination of 80 hrs. in Hindi, 80 in
Kannada or 120 in Kannada and 40 hrs in
Hindi.”
Syed Hoda
Senior Director
Operations, Globalization Centre
Cisco

29. http://www.nokia.com/corporate-
responsibility/cr-report-
2007/employees/labor-practices
http://www.nokia.com/corporate-
responsibility/employees/who-we-are