438 PART 5 Meeting Other HR GoalsCorporate CamPaignsBr.docx

438 PART 5 Meeting Other HR Goals
Corporate CamPaigns
Bringing Public,
financial, or Political
pressure on emPloYers
during union
organization and
contract negotiation
i-S5 ExPlain how
management and
unions negotiate
c ontra cts.
Collectivc Bargaining
Negotiation between
union rePresentatives
and management
representatives to
arrive at a contract

defining conditions of
emploYment for the
term ofthe contract
and to administer that
c ontra ct.
Another altemati'e to traditional organizing is to
conduct corPorate
campaigns_bringlng"putl,.,-lrr-,ur-r.iai, or n4r.J pressure
on e.rployers during
union organization nr-ri .orrar".t negotiatior-r."
th"^Amalgamated Clothi'g ar-id
Textile Workers Union (ACTWU) corporare
campaign against textile maker i' P'
Srevens during ,lr" tu,.'iqiO, *u, ot. oithe firrt ,u.."!,ft'l
tolporate campaigns and
served as a modei fo, ;h;; ,h", iotto.'.d. The ACT7U organized
a bovcort of J' P'
Stevens products
".rd
rhr"^t"r1ed to withdraw its pension funds from
financial institu-
tions where J.
p. St"rr.r-r, onl."., ".*a ",

dir".ro.r. The company eventually agreed to
u .or-rtru.t with Acrx7U'33 ployer neutrality
Another winning union organizing sttategy is to negotlate
em
and card-che.k prorrislo-ns i.rJu .or-rriu.r. uid". ^n"utility
provision, the employer
pledgesnottoopposeorganizingattemptselsewhereinthecompany.
Acard.check
provisionis an agreem.rr, Ih", if a cerrain percentage-by law,
at least a rnajority-of
employeessignanu,,'ho'l'"tio"card'theemployerwillrecognizetheir
unionrepre'
sentation. Art i-purtluf;;il; ug"*y' such as the American
Arbitration Associa'
rion, counrs.h".".d.]EiriJ""* **g"rrs thar this strategy
can be very effective for
,14
unions.
DecertifYing a Union
The Taft.Hartiey Act expanded union members'
right to be represented by leaders of
rheir own choosing rol-',iud. the right to vote o,,i
ut existing union' This action is

.lif"Jar..rrrfying tlhe union. Decertification foilows
the same process as a representa-
tion election' Ar1 .l.tiio''t to decertifu a union may not
take place when a contract is
t"
i#it": decertification elecrions are held, unions often do not
fare well'35 During
the past fsqr years, .,'-'Jt' have lost betu'een 54 and 64
percent of decertification
elections. tn u.ro.n., f1;; ;; ".riorrr,
the nurnber of decertification elections has
increased frorn abour ip"r."", "r"11 "l".rior-r,
in the 1950s and 1960s to more than
double that rate in recent Years'
Cotleetive Bargaining
WhentheNLRBhu,.".tifi"dauttion,rhatunionrepresentsemployees
duringcon-
tract negotiations' ln collective bargaining' 1 ""t" 1:g:^t:it:t
on behalf of its
members with rnanagement representatives
to arrive at a contract defining conditions
of employrnent for the rerm of th" contracr
and to resoive differences in the way they
interpret th" .or.,tru.r. Typi.ul contracts i".r"a" provlsions

for pay' benefits' rl'ork
rules, and resolution of r,r,orkers' grievances'
Table 14.2 shows typicai provisions nego-
tiated in coliective bargaining contracts'
Collectivebargainingdiffersfromonesituationtoanotherintermsofb
oryaining
stl.ilctriIe-that is, the range of employees
and employets covered by the contfact.
A contract may involve a narrow gtottp oi "*ployt"'
in a craft union or a broad
groupinanindustrialunion.Contracls*uy.ou.,oneorseveralfacilitie
softhesame
emploi'er,orthebargainingStrUcrUre.mavinvolveseveral.mployer
s.Manymore
inreresrs must be .o.,-riJ"r"E in coliective targaining
for an industrial union with a
bargaining ,,r.,.,r.. ,6JJi;;;.; several "*fioy.r.
Ih"., in collective bargaining for
u .Lf, .rnion in a single {acilitY'
The majority of .lor-rrru.t negotiations rake
place betlveen unions and employers
that have b..,-, throi,"gJ;h;;;;:;;, b.fore. ln tle typicai
siruation, manasement has
come to accept th" .,iio. as an organizutio., lt *.,ri *ork

with. The situation can be
I
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I
!
d
a
a
PI
Pa
le:
CHAPTER 14 Collective Bargaining and Labor Relations 439
rrporate
:rs during
hing and
aker J. P.
aigns and
rtt of J. P.
tl institu-
agreed to
:reutrality
employer
:ard-check

oriry-of
on fepre.
Associa-
:ctive for
leaders of
action is
presenta-
lntract is
i5
Driring
rification
tior-rs has
rore than
rlng con-
alf of its
rnditions
u'ay they
its, rvork
)ns nego-
urgcining
:Ltlltract.
a L,road
rhe san-ie
l1' mtlfe
: *'irh a
ir:nq tor

Establishment
and
administralion
o{ the
agreement
Funclions,
righls, and
responsibil ities
Wage
determination
and
administration
Job or income
security
Plant operations
Paid and unpaid
leaye
Bargaining unit and plant supplements
Contract duration and reopening and renegotiation provisions
Union security and the checkoff
Special bargaining committees
Grievance procedures
Arbitration and mediation
Strikes and loekouts

Contract enforcement
Management rights clauses
Plant removal
Subcontracting
Union activities on c0mpany time and premises
Union-mana gement cooperation
Regulation oftechnological change
l
Advance notice and consultation
General provisions
Rate structure and wage dlfferentials
Allowances
lncentive systems and production bonus plans
Production standards and time studies
Job classification and job evaluation
lndividual wage adjustments
General wage adjustments during the contract period
Hiring and transfer arrangements

Employment and income guarantees
Reporting and call-in pay
Supplemental unemployment benefit plans
Regulation of overtime, shift work, etc.
Reduction of hours to forestall layoffs
l
Layoff procedures; seniority; recall :
Worksharing in lieu of layoff
Attrition arra n gements
Promotion practices
Training and retraining
Relocation allowances
Severance pay and layoff benefit plans
Special funds and study committees
Work and shop rules
Best periods and other in-planttime allowances
Safety and health
Plant committees
Hours of work and premium pay practices
Shift operations
Hazardous work

Discipline and discharge
Vacations and holidays
Sick leave
Funeral and personal leave
Military leave and jury duty
: {Continued)
i
I
Tai:ie i4.2
Typical Provisions in
Collective Bargaining
Contracts
la
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Concluded
Employee
benefit plans
Special groups
Health and insurance plans
Pension plans
Profit-sharing, stock purchase, and thrift plans
Bonus plans
Apprentices and learners
Workers with disabilities and older workers
Women
Veterans
Union representatives
Nondiscrimination clauses
;

SOURCE: T. A. Kochan, Collective Bargaining and lndustrial
Re/ations (Homewood. lL: Richard D
lrwin, 1980), p. 29. Original data from J. W Bloch, "Union
Contracts-A New Series of Studies,"
Monthly Labor Review 87 (October 1 96a). pp. 1 184-85.
very different l,hen a union has jr-rst been certifiecl ar-id is
negotiating its first contract.
in over one-fourth of negotiations for a first contract, the
parties are unable to reach
an agreement.l6
Bargaining over New Contracts
Clearly, the outcome of contract negotiations can have
importairt consequences for
labor costs, productirrity, ar-id tl-ie organizatiot-r's abiiitl' to
compete. Therefole, unions
ar-rd managernent need to prepare careftrlly for collective
bargaining. Preparation
incildes establishing objectives for tl-ie contract, revierving the
oid contract, gathering
data (sr:ch as collrl.rensation paid by competitors and the
cornpany's ability to survive a
strike), preclicting rhe likely tlen-rands to be ir-rade, and
establishing the cost of meeting
the demandr.li Thir pfeparatioll can help negotiatols develop a
plan for hor.v tcr
negoriate. Different situations and goals cail for diffelent
approaches to bargaining,
,.r."1-, ,, rhe follorving akernatives p.opor"d by Richard Waltor-
r ar-rd Robert McKersie,3s
o Distributiuebargaining divides an econotnic "pie" bettr,een
two sides-for example,

a wage increase rteatls giving the union a larger share of the
pie.
. Tnteg'atiue bargaining looks for win-win solutions, 01'
olltcomes in r'vhich both sitles
bei-refit. If the organization's labor costs hurt its perfor-rnance,
integrative bargaining
rnight seek to avoicl layoffs in exchange for r'r'ork rules that
irnprove prodr.rctirrity'
. Attitudinal strucngingfocuses on establishing a relationship of
frr,rsl. The parties are
concerned about ensuring that the other side will keep its part of
ar-ry bargain.
. Intl'aorganizational bargaining a.lclresses cot-rflicts u'ithir-r
union or lnanagelnent
groups or objectives, such as betlveen new elnployees and
u,orkers rvith i-righ senior-
ity or betu'een cost control and redr,iction of turnover'
Tl're collective bargairring process rnay involve ar-ry cornbir-
ration of these alternatives.
Negotiatioirs go through various ,tug"r.19 In the earliest stages,
lnany llore peo-
ple are often present than in later stages. Or-r the union side,
rhis may gi-,'e all the
various internal iirterest groups a chance to participate and
voice their goals. Their
input helps comrnunicate to {ranagement rvl-rat .,vi11 satisfy
union rnembers and inay
l-relp the unron achieve grearer solidarity. Ar this stage, union
negotiators often pres-
enr a 1o11g list of propctsals, partly to satisfy members and

partly to introduce enough
lS5ue
pres€
ptop,
D
even
Horv
and r
In
negol
one-r
ltressr
barga
agfeet
party.
costs
and p,
Whe
The i
able tt
produt
end, tl
ciiffere
CHAPTER 14 Collective Bargaining and Labor Relations 441
issues rhar they rvill have flexibi1iry later in the process.

Management ma)'or tllav not
present proposals of its ou,n. Sornetimes manageltellt plefers to
react to the r-tnion's
proposals.
During the rniddle stages of the process, each side mLlst make a
series of tlecisittns,
even thollgh the outcone is uncertain. How important is each
issue to the t-rtl-rer side?
Hon'likely is it that disagreement on particular issues r.r'ill
result in a strikeJ lfhen
anc'l to r'hat extent sholrld one sicle signal its willir-rgness [o
cotnprotuisel
In tl-re final stage of r-regotiatrons, pressure for: an agreernent
iucreases. PLrblic
negoriarions rnay be only part of the process. Negotiators from
each sitle may hold
one-on-one meetings or sma11-group meetil.rgs rvhere t}-rey
escape some 1',r-rblic relations
presslrres. A rLentral third party may act as a go-betn'een ot
facilitator. In some cases,
bargaining breaks dou,n as the trvo sides fincl they cannot reach
a mutually acceptable
agreencnt. The outcorne depends partly on the relatir.e
bargaining pou'er of each
party. That LrLr:er, in tr-rrn, depends on each party's ability
to lr,ithstar-icl a strike, which
costs the n,orkers their pa1'during the strike and costs the
ernplol'er lost prodr-rction
and possil--l.v lost cnstomels.
When Bargaining Breaks Down
The intencletl oLrtcorne of coilective bargaining is a contract
u'ith terns accelrt-
able to both parties. It one trr both sides deterrnine tl-rat

negotiatloll alone rvill not
produce such an asreerrent, bargaining bleaks dorvn. To bring
this impasse lo an
end, the union mal strike , or tfie parties rnay bring in otitside
help to resolve their
tJ ifferences.
Citing the strong
potential lor loss ofjobs,
union members protest
Verizon's selling of its
landline business to
Frontier Comntunications
in West Virgiria.
for
ons
-ion
:ing
vea
ri.ng
1tO
itg'
ls
e:
ple,
ides
ring
ty.
, are

rent
Lior'-
/es.
teo-
the
heir
may
)res-
,r-rgh
t*2 ldentify the
factors that most
strongly influence
HRM in internationai
ma rkets.
work together ro improve the quality of decision making. The
participants from vari-
ous counrries and cultures contribute ideas from a position
ofequality, rather than the
parent country's culture dominating.
Faetsrs Affeeting hlR,lt in Interr:aticnal |*tarkets
Whatever their level of globai participation, organizations that
operate in more than
one country must recognize that the countries are not identical

and differ in terrns of
many factors. To simplify this discussion, we focus on four
major factors:
r culture
r education
o econornic systems
. political-1egal systems
Culture
By far the most important influence on international HRM is the
culture of the coun-
try rn rvhich a faciliry is located. Cultwe is a cornmunity's set
of shared assumptions
abour how the world works and u,hat ideals are rvorth striving
for.7 Cultural influ-
ences may be expressed through custolns, languages, religions,
and so on.
Culture is important to HRM for tu'o reasons. First, it often
determines the other
three international influences. Culture can greatly affect a
country's larvs, because
iarvs often are based on the culture's definitions of right and
wr,rng. Culture aiso influ-
ences whar people value, so it affects peoplet economic systelns
and efforts to invest
in education.
Even more important for understanding human resource
management, culture
often deterrnines the effectiver-ress of various HRM practices.
Practices that are effec-
rir.e in the United States, for example, rnay fail or even
backfire in a country with
different beliefs and values.s Cor-rsider the five dirnensions of

culture that Geert
Hofstede identified in his classic study of culture,e
l.Indiuidtnlismlcollectiyism describes the strength of the
relation betr.r'een an indi-
vidual and other individuals ilr the society. In cultures that are
high in individuai-
ism, such as the United States, Great Britain, and the
Netherlands, people tend
to think and act as individuals rather than as members of a
group. People in
these countries are expected to stand on their own two feet,
rather than be pro.
tected by the group. In cukures that are high in collectivism,
such as Colombia,
Pakistan, and Thiwan, people think of themselves mainly as
group members.
They are expected to devote themseives to the interests of the
comrnunity, and
the community is expected to protect thern when they are in
trouble.
T.Powet'distance concems the way the cukure deals with
unequal distribution of
power and defines the amount of inequality that is normal. ln
countries with
large power disrances, including india and the Philippines, the
culture defines it
as normal to maintain large differences in porver. ln countries
with srnall power
disrances, such as Denmark and Israel, peopie try to eliminate
inequalities. One
way to see differences in power distance is in the way people
talk to one another.
In the high.power-disrance countries of Mexico and Japan,
people address one

another rvirh titles (Seflor Srnith, Smirh-san). At the otfier
extreme, in the
United States, in most situations people use one another's first
names-behavior
that would be disrespectful in other cultures'
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For ir
lead,
1IIana
to mi
mana
of the
an ori
Cir
the e;
ofac

seen a
favorir
organi
mr-rch
Job
high "1
the de
balked
they hr
decisio
tor in I
ism. Tl
CHAPTER 15 Managing Human Resources G
ran-
rn the
l"q.
: thar-r
nns of
,illr:-,:
inrli:-
r olh-:
,-aalr!-
r ir-ii-l,.i-
inr-e si
culture

: effec-
rv with
Geert
n indi-
rridual-
,ie tend
ople in
be pro-
lombia,
embers.
ity, aird
.rtion of
es u'ith
:fines it
"1 porver
es. One
lnother.
ress one
, in the
rehavior
3. L|ncertaintl avoidance describes how cultures handle the
fact that the future is unpredictable' High uncertainly
avoidance refers to a strong cultural preference for struc-
tured situations. In countries such as Greece and Portugal,
people tend to rely heavily on religion,,larv, and technology
io giu" them a degree of security and clear rules aboul how
to behar,.. In countries with low uncertainty avoidance'

including Singapore and Jamaica, people seem to take each
day 25 i1 comes.
4. Masculinitylfemininity is the emphasis a cuiture places on
pnctices oi qu"liti"t thar have ttaditionally been consid-
ired mascuiine or feminine' A "ntasculine" culture is a cul-
ture that values achievement, money making, assertiveness'
,U ."-p"tition. A "felninine" culture is orle rhat places
""f'rrgi-,
trft" on relationships, service' care for the rveak'
u.a"pr"r.rt'ing the environment' ln this model' Germany
l,.,Ji;;;";.?*u*ptt' of *u"ttii'-'" cultures' and sweden and
ln Taiwan, a country that is high in collectivism'
co-rvorkers consider themselves more as
group
nrernbers instead of individuals'
Nonvay are exam'
n
ll
ples of feminine cultures'
5. Long-termlrtrorurrr^"oiiunr4tion suggesrs rvhether
the focus of cu1t,rral r'alnes is on

the future (lor-rg ,"r*i o", iir" p*r??,a present (short term).
cultures
u'ith a long'
rerm orientation value saving ancl persistence,
rvhich tend to pay off in tl-re future'
Many Asiar-r countries, incluling Japan and China' have
a long'terrn orientation'
Short_terrn ori.r-rrurior-rr, ^,
i" ir-r. .irrtures of the United states, Russia, and west
Africa, promore ;;;; f..p"r, tradition and for fuifilling sociai
obligatio^s ir-r
the present.
Such cultural characterrstics as tl-rese influence
the ways members of an organization
behave toward orr"
"r-ro,h.r,
as weil as their attitudes totvard vafious HRM
practices'
For insrance, cultures differ strongly in their opinions about
how managels sl-rould
leacl, how decisions ,f-r."iJU. f-t""?i"d, and what motivates
employees' In Germany'
managers achieve their status by dernonstrating
technical.skills,-and
employees look

ro managers to assign asks and resolve re.h"r-ri."l problems- In
the Netherlands'
;r;;;;."i;;*." ritittg "e""tt"1;,^txchanging 'iervs'
and baiancing the interests
of the people affected ;;; #;;;;.fr Cl.urly, iiffl."r-'.., like.these
'r'ould affect
l'rorv
^"
.rg""""rion selects and trains its nanagers and measures their
performance'
Cultures strongly influence the appropriateness of HRM
practices' For example'
the exrenr to .,r,hich "
."tr"r" o inditrdlalisr or collecrivist will affect the success
of a compensarion program. Compensation tied to individual
performance may be
seen as fairer ar-rd ,no.""*oit.,uJ"g Uy *"-lers of an
i.dividualist cuiture; a
culture
favoring individualism wili be ,]roi=" u.."p.ing of grbat
differences
in pay between the
organizario.r,r l-,igh.rt- il f;;;;rid "*plly."i.
Collecti'ist cultr'rres tend to have
much flatter PaY structllres'

Job design aimed at employee efrlpowerment
can be problematic in cultures with
higfi,,pou,er distance.,' In a Mexican ,lipp".-*ur-rrrfacturing
plant, an effort to expand
the decision-making ""ifr..iiv
.i p.od.r.rior', workers stumbled when the workers
balkeil ar doing rvhar they saw as the supervisor's proper -re-
sponsibility'i1
Realizing
they hacl mo'ed too quickiy, the plant's nra'ug"* tu"-u"*h"-
,::"p" of the
workers'
decision.makir-rg uuthJrJv it'ri't"v ."rfa adapi ro rhe role. On
the
other hanc{' a fac-
tor in favor of "*po*".-ent
at ti-iat plant was the Mexican culture's high collectiv-
isrn. The ,,vorkers iit.Jdir.',"ri'g team-related information and
using the infortnalior-r
il
4
*

cuitural differences
organlzatlon.
to benefit the entire tean. As in this example, a culture does not
nece$sariiy rule out a
particuiar HRM practice, such as employee empowerment, but it
sholrld be a consid'
"r"tion
in deciding ho* io carry out ih.'p.*.tice.
Finally, cultural differences can affect horv people
communicate and holr, rhey
coordinare their activities. In collectivist cr-rltures, people tend
to v{lue grotrp deci-
sion making, as in rhe previous example. When a person raised
in an individualis-
tic culture must work closely with people from a collectivist
culture, dommunication
problems and conflicrs often occur. People from the collectivist
cultlrre tend to col-
iaborate heavily and may evaluate the individualistic person as
unwilling to cooperate
and share information with them. Cr-rltural differences in
communicalion affected the
$,ay a Norrh American agricultural company embarked on
e*pioye{ elnpowerment
at irs facilities in t he United States and Brazil.lz Empowerment
reqr-ri]res information
sharing, but in Brazil, high power distance leads ernpioyees to
exp€ict managers to
make decisions, so they do not desire information that is
appropriate[y held by man-
agers. Empowering the Brazilian employees required invoiving

*"r't{g"tt directly in
giving and sharing information to show that this practice was in
keepifrg with rhe tra-
ditional chain of command. Also, because uncertainty avoidance
is airother aspect of
Brazilian culture, managers explained that greater information
sharir{g would reduce
uncertainry abour their work. Ar the same tirne, greater
coliectivisrr] in Brazil made
employees cornfortable with the day-to-day cornmunication of
tearnr]vork. The indi-
vidualistic U.S. employees needed to be sold more on this
aspect of empowetment.
The "HR Oops!" box describes another example of
miscommunicatiotr resulting from
Em
sior
wer
res(
con
sian
senl
and
hear
matt
the
turn(
A:
empl
lem.'
unde
busin
off ee
risks

Because of these challenges, organizations must prepare
managErs to recognize
and handle cultural differences. They may recruit managers
wi*1 knowledge of
other cultures or provide trainir-rg, as described later in the
chapt{r. For expatri-
ate assignments, organizations may need to conduct an
extensive sdlection process
to idenlify individuals who can adapt to new environmenls. At
thp sarne time' it
is important to be wary of stereotypes and avoid exaggerating
the importance of
cult,,,ial differences. Recent research ti-rat examined Hofstede's
rnQdel of cultural
differer-ices found that differences among organizations within
a pafticular culture
were sometimes larger than differences from country to
country.ls Tfris finding sug'
gests that it is importanr for an organization to match its HR
pracriqes to its vaiues;
i*ndivlduals *ho
'ha'"
those valu-es are likely to be interested in t]'orklttg for the
prlmar
withor
is sign
Cor
able er
and th,
educat,
In cont

countrj
Econr
A corrnt
involver
activirie
As lv
are likel
developi
opportur
students
for incre
their edu
The i
oped cor
shor.v up
Education and Skitl Levets
Counrries also differ in the degree to which their'labor markets
lnclilde people u'ith
education and skills of value to employers. As discussed in
Chaptet 1, the Unired
States suffers from a shortage of skilied rvorkers in many
occupationN, and the prob-
lem is expected to increase. For example, the need for
knowledge wor|<ers (engineers,
te:rchers, scientists, health .ur" *ork"rr) is expected to grow
almost twice as fast as
rhe or.erali rate of job growth in the United Stut.s.14 On the
other l,rand, the labor
narkers in rnany countries are very attractive because they offer
higfr skills and low
'ages.

E.lucational opportunities aiso vary from one country to
another. In general, spend-
ing on education is greater per pupii in high-income countries
than in pooref coun-
t.i,.r.15 Poverry, diseases such as AIDS, and political turmoil
keep children away frorn
scfiool in some areas. A concerted international effort to
provide universal access to
rule out a
a consid-
hou' the),
:oup cleci-
lividualis-
runication
r-rd to col-
coopetate
{ected the
ovefmenI
formation
1llagers to
d by rnan-
-lirectiy ir-r
rh the tra-
r aspect of
rui.l reduce
rir.-il made
T1're indi-
-)'e r1TIe11t.

ritir-rg froin
recognizc
'ii'ledge of
rl expa[li-
Jl-r process
1e ti1ne, it
rrtance of
rf cr,rltr-rral
lar cr.rltr,rre
ncling sug-
its valnes;
ng for the
eople rvith
he UrLited
I the prob-
.engineers,
: as fast as
, the labor
ls ancl low
ral, spend-
Oref colrll-
au'ay frclm
rl access to
Employees in the British divi-
sion of an oil and gas company
were frustrated. TheY carefullY
researched ideas for where to
conduct exploration in the Per-
sian Gulf.TheY wrote rePorts Pre-
senting their recommendations

and sent them to the company's
headquarters in Texas- But no
rnatter what theY recommended,
the British division's ideas were
turned down.
As it turned out. the British
employees had a cultural Prob-
lem. TheY were using the careful,
understated language of their
business culture' TheY started
off each report bY identifYing the
risks of the Proposal. Next, theY
laid out historical background'
Finally, at the end of the report.
the writers presented the possible
opportunities.
Back in Texas, management
had the optimistic, can-do sPirit
typical of U.S. business culture'
Theywere looking forthe positives
and exPected ProPosal writers to
actively sell them on exPloration
ideas. Without that message, the
managers at headquarters con-
cluded that the ProPosals must
not be verY attractive' When the
British team learned to reorganize
and rePhrase their reports for an
American audience, theY started
winning aPProvals.

Source:Based on Jill Rose, "Cioba:
Mindset, " Ame rican Executive, Ja:"=-'
2010, pp. 7-9.
Ouestions
1. ln this examPle, who made
a mistake-the writers of the
proPosal or the readers of the
proPosal? WhY?
2. lmagine You are involved
in recruiting a manager
for a British facilitY of Your
companY. Based on the
examPle given here, what
cultural differences in
communication might You
expect, and how might theY
aff'ect Your search for qualifiei
candidates in Britain?
prifirary education has dramatically reducetl the ni-nnber
and proportionof children
without access ro ,.nooti'ri.-fto*"u"r, ,1-r",prob1"t',t persists
in s'-rb'saharan Africa and
is sigrrilicant brrr dcclining in South Asia'" l .l ..-- r;- I ..;.
Cornpanies witl-r foreig"n operariolls io.nt. irt .o.,nt.i"s rui-r"r"
ih"y aan find Siiii-

able
"mployees.
The .d.r".ntfor', and skill levels of a countty's iabor force affect
horv
a1d rhe extent to which companies vant to operate there. In
countries with a
poorly
eclucated population, .o*pu,]i., rvill lirnir their activities to
lorv-skili, low-wage
jobs'
lr-, .or-rtrurt, ir-rdiu', large pool of well-trainecl technical
workers is one
teason that the
coLlntry has becone u-pop'-,|r. location for outsottrcing
colllptlter programming
jobs'
Economic SYstem
A co6ntry's economic system, rv|ether capitalisr or socialist, as
wcll as the governrnent's
involvernent in the economy throltgh ,u*", o. cornpensatiotl,
price controls, and
other
ul,r,,i,i"r, influeirces hurnan resource lnanagement practices in
a
number of r'r'ays'
As lvith all aspects of a region's ot country's life, the economic

system
and c'-rlture
u." i,t lLy tc, b. closely ried, pror,iding many of the incenri'es
or disincentives
for
.1..,.1npir-rg the value of the'i"bo. for.". Socialist economic
systems provide
ample
.pp"t-ir"iii"s for edr-rcational development because the
education system
is free to
stlrcients. Ar the same tilne, socialisrn may not provide
economic
rewards (higher pay).
for ir-icreasing one's "at't"'io^'
ln capitalist ')"t"'.',t'
str-rdents-bear more of the cost of
their ed.rcatiln, br-rt employers rer'vard those
q'ho invest in edtrcation'
The healtir ,-,,r *r-r ".Jr.Io*o
systerrr affects humar1 resource lnallagement' in devel-
op*l
-.orr'rries
rvith gr"u, ru"ulrh, labor costs are relatively high' Such
differences

shoi.v up in compensat;on systems and in recrtriri'g ar-rd
selection
clecisions'
A AC,
Students at the University of Warsaw in Poland are provided
with
a government-supported educatior. in general, former Soviet
bloc countries tend to be generous in funding education, so they
tend to have highly educated and skilled labor forces. Capitalist
countries such as the United States generally leave higier
education
up to individual students to pay for, but the labor market
rewards
students who eam a college degree.
In general, socialist systems take a higher per-
centage of each worker's income as the worker's
income increases. Capitalist systems tend to let
workers keep more of their earnings. In this way,
socialism redisffibures wealth from high earners
to the poor, while capitaiism apparently rewards
individual accomplishments. In any case, since the
amount of take-home pay a worker receives after
taxes may thus differ from country to country, in an
organization that pays two managers in two coun-
tries $100,000 each, the manager in one country
might take home more than the manager in the
other country. Such differences make pay structures
more complicated when they cross national bound-
aries, and they can affect recruiting of candidates

from more than one country.
Political-Legal System
A countryt political-legal system-its government,
laws, and regulations-strongly impinges on human
resource management. The country's laws often dic-
tate the requirements for certain HRM practices,
such as training, compensation, hiring, firing, and
layoffs. As we noted in the discussion of culture, the
political-legal system arises [o a large degree from
;i
ti
il
ill
:i
1-i:
):
F
t
A
tir
e>
t'
CC
pr
pa

glr
en
avi
m€
op,
fac
bei
fac
als,
pos
I
the culture in which it exists, so laws and regulations reflect
cultural values.
For example, the United States has led the world in eliminating
discrimination in
the workplace. Because this value is important in U.S. culture,
the nation has legal
safeguards such as the equal employment opportunity laws
discussed in Chapter 3,
which affect hiring and other HRM decisions. As a society, the
United Sutes also
has strong beliefs regarding the fairness of pay systems. Thus,
the Fair Labor Standards
Act (discussed in Chapter 11), among other iaws and
regulations, sets a minimum
wage for a variety of 1obs. Other iaws and regulations dictate
much of the process of
negotiation between unions and management. All these are
examples of laws and

regulations that affect the practice of HRM in the United States.
Similarly, laws and regulations in other countries reflect the
norrns of their cul-
tures. In Westem Europe, where many counlries have had strong
socialist parties,
some iaws have been aimed at protecting the rights and benefits
of workers. Until
recently, workers in Germany and France had 35-hour
workweeks, but under grow-
ing pressure to adopt the "Anglo-Saxon model" emphasizing
productivity, many have
made concessions. The European Union's standard permits
workweeks of up to 48
hours.17
An organization that expands internationally must gain
expertise in the host
country's legal requirements and ways of dealing with its legal
systgm, often iead-
ing organizations to hire one or more host-country nationals to
help in the process.
Some countries have iaws requiring that a certain percentage of
the ernployees of any
foreign-owned subsidiary be host-country nationals, and in the
context of our discus-
sion here, this legal challenge to an organization's HRM may
hold an advantage if
handled creatively.
par
out
side
I
and

othr
wor
emF
rvorl
this
5e
Man
facilr
Mex
cultu
most
easill
anotl
assigr
may
overs'
counl
availa
Ev,
rhird-
outwe

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