This Presentation includes the Cultural, and impact of IHRM. Control mechanism of cultural controlling.

1. The cultural context of
IHRM
Abdul Rashed Barakzai
Chapter # 2

2. WHAT IS CULTURE?
The term originated from the latin word colere.
Culture consist in patterned ways of thinking,
feeling, and reacting, acquired and transmitted
mainly by symbols, consisting the distinctive
achievements of human groups. Including their
embodiments in artefact; the essential core of
culture consists of traditional idea and especially
their attached values. “Dutch researcher Geert
Hofsteded”

3. IMPACT OF CULTURE ON IHRM
HRM Practices Impact of the cultural context
Recruitment and selection  In societies low on ‘in-group collectivism’ individual achievements represent important
selection criteria.
 In societies high on ‘in-group collectivism’ the emphasis in the recruiting process is more on
team-related skills than on individual competencies.
Training and development  In societies high on gender egalitarianism women have the same chances for vertical career
advancement as men.
 In societies low on gender egalitarianism female managers are rare.
Compensation  In societies high on uncertainty avoidance employees tend to be rather risk averse and prefer
fixed compensation packages or seniority-based pay.
 In societies low on uncertainty avoidance employees tend to be rather risk-taking and accept
high income variability through performance-based pay.
Task distribution  Societies high on collectivism tend to emphasize group work.
 Societies high on individualism rather attribute individual responsibilities in the work system.

4. MANAGEMENT DEMANDS OF INTERNATIONAL GROWTH
Management
demands of
internationalization
Size
Structure
Geographical
Dispersion
Control
Mechanisms
National cultures
& Languages
Host country
demands
Operation Modes
Flow & Volume of
information

5. • In late 1978, the Chinese government announced an open-door policy and commenced
economic reforms aimed at moving the country from a centrally planned to a market economy.
Western firms that entered China early were more or less forced to enter into joint ventures
with state- owned enterprises (SOEs), whereas those entering later have been able to establish
wholly owned subsidiaries (WOSs).
• One case in the Buckley et al. study is Shanghai Bell – a joint venture formed in 1983 between
a Belgian telecommunications firm (now Alcatel Bell), the Belgian government and the Chinese
Postal and Telecommunications Industries Corporation (PTIC). There was a gradual transfer of
relevant technology by the Belgian firm, with a long-term reliance on Belgian expatriates. The
Belgian firm had limited control over the Chinese employees in the joint venture and was con-
strained by its partner’s expectations and differing goals.
MODE OF OPERATION

6. • The second case researched was much different. The US telecommunications firm,
Motorola, established a wholly owned operation in Tianjin, China, in 1992. Changing
conditions in China meant that Motorola could effectively build a ‘transplant factory’:
importing production equipment, organizational processes and practices from either the
parent or other subsidiaries in its global network. This enabled Motorola to integrate the
Chinese operation into the broader corporate network and to localize management. These
have been supported by HRM initiatives such as a special management training program
(China Accelerated Management Program – CAMP)37, English language training and
transfer of Chinese employees into the US operations.
CONTINUE...

7. • Control mechanism plays a very important role in
organization specially in IHRM.
• Control Strategy: Is the process used by
organizations to control the formation and
execution of strategic Plan. It also focused on the
achievement of future goals, rather than the
evaluation of past performance.
CONTROL MECHANISM FOR MULTINATIONAL FIRMS

8. There are Two types of control strategies for multinational
firms
• Structure Formal focus
• Cultural informal focus
CONTROL MECHANISMS

9. CULTURAL INFORMAL

10. 1. Control through personal relationship:
 Lateral communication via a network of working relationship
 Developed network from working history
 Contact, Norms and Trust
 Knowledge sharing
 Build network relationship through personal contact
Example: Working in cross-functional and/or cross-border teams can assist in developing personal
contacts. Training and development programs, held in regional centers or at headquarters, become an
important forum for the development of personal networks that foster informal communication
channels.
REVIEW OF INFORMAL CONTROL PROCESS

11. 2. Control through corporate culture:
 Corporate culture is variously defined Corporate culture is variously defined,
but essentially it refers to a process of socializing people so that they come to
share a common set of values and beliefs that then shape their behavior and
perspectives. It is often expressed as ‘our way of doing things’.
 It is continuous process
 Placement of staff ( another method)
REVIEW OF INFORMAL CONTROL PROCESS

12. STRUCTURE FORMAL
FOCUS

13. • Determine Areas to be control
• Established standards
• Measure Performance by identifying effective and
efficient indicators
• Control evaluation or comparison
• Taking corrective action
• Re-lunching with accepted standards
CONTROL PROCESS

14. SALES SUBSIDIARY

15. INTERNATIONAL DIVISION

16. GLOBAL PRODUCT DIVISION STRUCTURE

17. GLOBAL PRODUCT DIVISION STRUCTURE

18. 1. Process
2. Business Process
INFORMATION SYSTEM ( BUSINESS PROCESS)

19. Process: Series of multi task that are completed
in order to accomplish a Goal.
Business Process: A process ( Series of Task)
that is focused on achieving a goal for business.
PROCESS

20. Case Study

21. Thank You!