Managing Across Cultures: Concepts, Policies and Practices

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Mohamed Branine

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  • Front Matter
  • Back Matter
  • Subject Index
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    List of Tables and Figures

    Tables
    • 2.1 The triggers and drivers of managing across cultures 12
    • 3.1 Summary of Hofstede's Cultural Dimensions 54
    • 3.2 The GLOBE project cultural dimensions 63
    • 3.3 The GLOBE project country clusters 64
    • 3.4 The present study's classification of global approaches to management 64
    • 4.1 Basic statistical indicators: The US and Canada 80
    • 4.2 Age structure (%) 2010, the US and Canada 82
    • 4.3 Workforce distribution by occupation in 2007 (%), the US and Canada 83
    • 4.4 Part-time employment as a percentage of total employment, the US and Canada 84
    • 4.5 Share of women of working age (14–64 years) in employment (%), the US and Canada 85
    • 5.1 Basic statistical indicators: The UK and Ireland 108
    • 5.2 Workforce distribution by occupation in 2006 (%), the UK and Ireland 111
    • 5.3 Age structure (%) (2010), the UK and Ireland 113
    • 6.1 Basic statistical indicators, Australia and New Zealand 146
    • 6.2 Workforce distribution by occupation in 2005 (%), Australia and New Zealand 148
    • 6.3 Age structure (%) (2009), Australia and New Zealand 150
    • 7.1 Basic statistical indicators, Japan and South Korea 182
    • 7.2 Employment by sector in Japan and South Korea (%) 185
    • 7.3 Unemployment rates 1990–2009 (%), Japan and South Korea 186
    • 7.4 Share of women of working age in employment (%) (selected industrialized countries) 188
    • 7.5 Age structure (%) (2009), Japan and South Korea 189
    • 7.6 Part-time employment as a percentage of total employment (selected industrialized countries) 189
    • 8.1 Basic statistical indicators, China and Hong Kong 216
    • 8.2 Labour and employment, China and Hong Kong 220
    • 8.3 Age structure (%) (2009), China and Hong Kong 220
    • 9.1 Basic statistical indicators, Indonesia and Malaysia 250
    • 9.2 Age structure (%) (2009) Indonesia and Malaysia 255
    • 9.3 Distribution of labour force by sector (%), Indonesia and Malaysia 256
    • 9.4 Number of trade unions and membership by gender, Malaysia, 2001–5 272
    • 10.1 Basic statistical indicators, Belgium and France 288
    • 10.2 Employment by sector in Belgium and France (%) 290
    • 10.3 Unemployment rates 1990–2009 (%), Belgium and France 291
    • 10.4 Age structure (%), (2009) Belgium and France 295
    • 10.5 Trade union density (1999–2007), Belgium and France 307
    • 11.1 Basic statistical indicators, Germany and the Netherlands 316
    • 11.2 Workforce distribution by occupation in 2009 (%), Germany and the Netherlands 318
    • 11.3 Age structure (%) (2009), Germany and the Netherlands 321
    • 11.4 Trade union density 1999–2007 (%), Germany and the Netherlands 335
    • 12.1 Basic statistical indicators, Denmark, Norway and Sweden 346
    • 12.2 Workforce distribution by occupation in 2009 (%), Denmark, Norway and Sweden 349
    • 12.3 Age structure (%) (2009), Denmark, Norway and Sweden 350
    • 12.4 Trade union density 1999–2007 (%), Denmark, Norway and Sweden 363
    • 13.1 Basic statistical indicators, Greece, Italy and Spain 370
    • 13.2 Workforce distribution by occupation in 2006 (%), Greece, Italy and Spain 373
    • 13.3 Age structure (%) (2009), Greece, Italy and Spain 374
    • 13.4 Trade union density 1999–2007 (%), Greece, Italy and Spain 388
    • 14.1 Basic statistical indicators of a sample of African countries 407
    • 14.2 GDP: per capita and composition by sector (%) in 2008, selected African countries 408
    • 14.3 Age structure (%) (2009), selected African countries 411
    • 15.1 Basic statistical indicators for most Arab countries 439
    • 15.2 Share of the petroleum sector in the economies of the Arab members of OPEC (2008) 440
    • 15.3 Workforce distribution by occupation in 2008 (%), for selected agricultural Arab countries 441
    • 15.4 GCC countries' population and workforce distribution between nationals and non-nationals (2009) 444
    • 15.5 Age structure of selected Arab countries (%) (2009) 445
    • 15.6 Male and female employment by sector (%) (2005), selected Arab countries 448
    • 16.1 Basic statistical indicators, selected emerging economies 475
    • 16.2 Age structure (%) (2009), selected emerging economies 482
    • 17.1 Basic statistical indicators of selected CEE countries 503
    • 17.2 Real GDP growth rate between 2000 and 2009 (%), selected CEE countries 504
    • 17.3 Workforce distribution by occupation in 2009 (%), selected CEE countries 506
    • 17.4 Age structure (%) (2009), selected CEE countries 509
    • 17.5 Employment by gender between 1999 and 2009 (%), selected CEE countries 510
    • 17.6 Part-time employment in selected CEE countries in comparison with some Western European countries (% of total employment) 510
    • 17.7 Union membership 2000 to 2007 (%), selected CEE countries 521
    • 18.1 Basic statistical indicators of selected South American countries 530
    • 18.2 Age structure (%) (2009), selected South American countries 533
    • 18.3 Workforce distribution by occupation in 2009 (%), selected South American countries 535
    • 18.4 South American countries with a national minimum wage (2007) 549
    Figures
    • 2.1 National, comparative and cross-cultural management 20
    • 2.2 The process of managing across cultures 21
    • 3.1 The contexts of managing across cultures 36

    List of Mini Case Studies

    • 1 The Western Expatriate in West Africa 23
    • 2 General Electric in Hungary 28
    • 3 No Job is Good Enough for Me Yet! (The US) 84
    • 4 The Assembly Line is Better than the Office: US Recruitment 93
    • 5 Ladies First (the UK) 113
    • 6 Work As You Like and Do What We Ask You to (the UK) 115
    • 7 I Wish I Were an Old Foreign Woman (Australia) 151
    • 8 The Wan Tan Slaughter House in the Asia-Pacific 155
    • 9 The 2002 New Zealand Cricket Pay Dispute 159
    • 10 The KiwiSaver Bill, New Zealand 160
    • 11 Minimum Union Membership in Australia 163
    • 12 From the US to Japanese MBA 199
    • 13 Age Before Beauty (Japan) 203
    • 14 Strikes at Citibank's Seoul Office 208
    • 15 Do As You Are Told (China) 227
    • 16 Got to be Tall, Fit and Good Looking (China) 231
    • 17 Western Management for Chinese Managers 237
    • 18 No Compulsion in Religion: South-East Asia 254
    • 19 A Trapped Workforce (Malaysia) 258
    • 20 Developing Tourism in Sabah State, Malaysia 266
    • 21 Appraisal and Favouritism: Malaysia 268
    • 22 France: The First Employment Contract 2006 291
    • 23 You are Unwanted Unless you are Highly Skilled 294
    • 24 Changing the ‘Last in, First out’ Principle (the Netherlands) 319
    • 25 The German Training Levy 330
    • 26 Strikes at the Netherlands Potato Starch Group 340
    • 27 Too Short for a Volvo (Sweden) 351
    • 28 Norway in the Right Way 359
    • 29 Danish Union Governance 362
    • 30 Regulating Part-time Employment in Greece 376
    • 31 Recruiting to Order in Spain 380
    • 32 Greek Union Power 390
    • 33 Africa: Give Me One Reason Why I Should Stay 415
    • 34 ‘Ubuntu existe partout’ 420
    • 35 Performance Appraisal in the Nigerian Civil Service 428
    • 36 Kenya: Flowers with Tears 432
    • 37 I Did Not Meet the Locals (the Gulf States) 446
    • 38 The World Goes Around: Islamic Management 460
    • 39 Global Products for Local Tastes (India) 478
    • 40 I Need a Good Reference (India) 488
    • 41 It Works in the West (Poland) 514
    • 42 Training for Changing Times (the CEE Countries) 518
    • 43 To Negotiate or Not to Negotiate (Romania) 523
    • 44 Marcopolo Brazil 536
    • 45 Say South America, You Get Football 538
    • 46 Young and Handsome from Lebanese Immigrants (Argentina) 544
    • 47 Can't Go or Won't Go: Female Expatriates 572

    Author Biography

    Professor Mohamed Branine is Director of Postgraduate Research Degrees and Postgraduate Admissions, and MBA Programme Director at Dundee Business School (DBS), University of Abertay Dundee. He graduated in economics and management from Algiers University, Algeria and received a PgDipBA, an MPhil and a PhD from Lancaster University in England. In 1991 he became a United Nations human resource management specialist teaching in its UNDP (United Nations Development Program) projects. He has taught at several universities including Lancaster, Manchester, Bradford and Stirling in the UK, the University of British Columbia in Vancouver (Canada), and the University of International Business and Economics in Beijing (People's Republic of China). Before joining the University of Abertay Dundee in 2002 he was a senior lecturer and MBA Programme Director at Stirling University. He is a well-known scholar in many African, Middle and Far Eastern countries for his comparative work which is published in several academic papers, research monographs and professional articles. His research interests are in international and comparative human resource management with particular focus on:

    • The determinants of different approaches to management and organization in different countries;
    • The practical challenges of managing across cultures for international managers in a competitive business environment;
    • The effects of international strategic alliances on national and international human resource development;
    • Graduate recruitment, job creation and labour market trends in Europe;
    • Culture and environmental awareness in the workplace; and
    • Perceptions of age and gender in work and employment in different cultures.

    Dr Branine is an active supervisor of doctoral students and masters' degree dissertations as well as teaching Human Resource Management, International Business and Business Research Methods to undergraduate and postgraduate students.

    Acknowledgements

    This book has drawn on many sources and it would have not been completed without the support of many people. I am indebted to all my colleagues, students, friends and family members for their support, encouragement and patience. I am indebted to all the authors whose work is reviewed, developed or just cited in this book. My particular thanks are to the reviewers and the editors of the first draft of the manuscript for their constructive comments and professional suggestions for improvements. My sincere thanks are to the team at Sage for their professional assistance and patience, in particular Natalie Aguilera, Clare Wells, Ruth Stitt, Rachel Eley and Ben Griffin-Sherwood. I would also like to take this opportunity to thank my mentors and former colleagues at Lancaster University, in particular Professor David H. Brown, Professor Frank Blackler and Dr Colin Brown for setting me on the right path to an academic career and for inspiring the ideas for this book; all my former colleagues at Stirling University, in particular Professor Chris Baldry and Dr Ian Glover for reviewing and supporting the proposal for this book; and all my current and former colleagues at Abertay University for their friendship and continuous support. My thanks are also to Professor Farhad Analoui and Professor Frank McDonald at Bradford University; Professor Kamel Mellahi at Warwick University; Professor Pawan Budhwar at Aston University; Professor Alex Scott and Iain Lauder at Herriot Watt University; Dr Aminu Mamman, Dr Chris Rees, Derek Edridge and Dr Farhad Hussein at Manchester University; Professor Peter Rosa at Edinburgh University, Martin Dowling at St Andrews University; Professor Robert Chia at Strathclyde University; Dr David Pollard at Leeds Metropolitan University; Professor Mike Hughes and Professor Jeff Hyman at Aberdeen University and Dr Azhdar Karami at Bangor Business School for their support over the years and their direct or indirect contribution to the completion of this project. Last but not least, I would like to thank and dedicate this book to my wife Nadia and our children Salim, Sarah and Nassim for their enduring patience and endless support over the years in which I have given more time to the completion of this book. Although every effort has been made to seek permission of the owners of copyright material and to fully acknowledge the authors whose work has been used, there may still be instances where this has been mistakenly overlooked in the process of undertaking this extensive project and I am very sorry in advance for any unwitting infringements.

    Guided Tour

    Learning outcomes: A clear set of key learning objectives are provided for each chapter.

    Introduction: The introduction outlines the main topics and issues to be covered in each chapter.

    Activity: In-class activities encourage discussion and provoke thought.

    Mini case study: The mini case studies throughout each chapter provide ‘real life’ examples that enhance understanding.

    Summary: The main points of each chapter are pulled together, making revision easy.

    Revision questions: Questions at the end of each chapter help you to check your understanding of the key issues in each chapter.

  • Glossary

    • Acculturation: A situation where individuals and groups of people respond to cross-cultural contacts and, while retaining their own cultural values and norms, they adopt new cultural values and norms to meet their social and economic needs. See also Adaptation.
    • Adaptation: A process of accepting and dealing positively with the terms and conditions of a new and different socio-cultural environment, and becoming able to accommodate the perspectives of another culture and respond successfully to its demands, rules and regulations. It is a change of behaviour from the norms of a home to those of a host culture in what is referred to as cognitive adaptation.
    • Affirmative action: Taking positive action to increase the representation of certain groups in society (for example ethnic groups, women and old people) in areas of education, employment and business.
    • Anthropology: The study of human communities and their origins by focusing on the ways of life and people's behaviours in past and the present contexts.
    • Arbitration: A process by which a third party is required to help two or more groups to reach an agreement. The third party (arbitrator) has the power to ask the disputing parties to accept the proposed solution.
    • Association of South East Asian Nations (ASEAN): An economic organization that was established in 1967 between Asian countries to promote exports of their goods to other nations.
    • Autocratic leadership: Leaders who attempt to control all aspects of managing an organization by determining the policies and procedures, instructing members what to do or make, and having a subjective and impersonal approach to dealing with subordinates. It is also referred to as ‘authoritarianism’.
    • Belief system: A way of thinking about and perceiving relationships and dealing with others within a society. Religions, ideologies and philosophies are examples of belief systems.
    • Brain drain: The migration of highly educated and skilled workforce from one country to another in search of employment and better standards of living and working.
    • Bureaucracy: An organizational process that is based on hierarchy of status, division of labour and formalization of rules and procedures.
    • Capitalism: A socio-economic system that is based on policies to promote the production and distribution of goods and services that accumulate capital and create profit. It is also related to the promotion of a free market economy.
    • Caste system: A hereditary system of segregation that is found on the Indian subcontinent where social status and class are determined at birth and conditioned by religious or other social beliefs.
    • Centralization: The concentration of power and control among very few people who make the decisions in an organization.
    • Centrally determined economy: An economy in which a central committee or institution of government decides on the allocation of resources and services according to a periodic plan.
    • Chaebol: Korean; chaebol translates as ‘financial clique’. In practice they are family-controlled and -owned conglomerates, structured into a number of companies in various businesses. They are similar to the Japanese kobal, zaibatsu and keiretsu
    • Chiefdom: A form of kin leadership that is found in countries where the political system is based on a relationship between the tribe and the state. The chief of the tribe or the village has substantial local powers.
    • Co-determination: A system of employee representation that requires workers and their managers to make collective management decisions. It is historically practised in Germany.
    • Collective agreement: An agreement between employers and trade unions over the terms and conditions of employment, normally the outcome of collective bargaining. In some countries such as the US and Canada collective agreements are legally binding, while in others such as the UK they are not.
    • Collective bargaining: A process by which one or more employers negotiate the terms and conditions of employment with one or more employee representatives or trade unions.
    • Collectivism: Individualism versus collectivism is one of the sociologist Geert Hofstede's cultural dimensions. Among other things, he suggested that in collectivist societies, people from birth onwards are integrated into strong, cohesive in-groups, which they continue to protect in exchange for unquestioning loyalty throughout their lifetime.
    • Colonialism: The economic, political and social domination of a territory and its people by a foreign power for a period of time.
    • Communism: The opposite of capitalism. It is an ideology/political theory that promotes the common ownership of the means of production in an economic system. Its most famous example is the command economy of the Soviet Union between 1917 and 1991.
    • Comparative advantage: Based on the theory of international trade, that a country should specialize in the production and export of goods that it can produce more cheaply and efficiently than others.
    • Comparative management: A field of study that covers the differences and similarities in management approaches within and between different countries and their impact on the trends and developments in international trade and business activity in different cultural settings.
    • Competencies: The levels and types of knowledge, skills and experience needed by an individual or a group of individuals to carry out the tasks or the functions assigned to them in an organization.
    • Competency-based pay: A reward system that recognizes employees' competence in applying their knowledge and skills in doing their jobs.
    • Competitive advantage: Based on the theory that a country's international competitive position depends on having the conditions that give it an advantage in producing a particular good or service.
    • Competitor: A person or an organization that competes with another person or organization for the use of the same resources (as inputs), the production of the same products or the provision of the same services (as outputs).
    • Confucianism: A moral philosophy and a system of ethical conduct that promotes harmony, peace and good morals in family life and society in general. Confucianism comes from the teachings of Confucius (551–479 BC), whose thinking still guides Chinese society with respect to learning, hierarchical relationships, standards of morality and social virtues.
    • Corruption: The misuse of public positions of power and authority for personal gains. It involves practices taken outside the formal legal framework of an organization to achieve individual or group benefits.
    • Cross-cultural: A situation where individuals from different cultures interact and attempt to understand each other's culture. The term is very often used in comparative studies of societies, international management and international business.
    • Cross-cultural awareness: This happens when a person gains cross-cultural knowledge and skills that enable her/him to understand and to appreciate the norms and values of a culture.
    • Cross-cultural communication: A process of dealing and communicating with people from different cultures. It has been developed into a subject of study that focuses on how people from different cultures communicate with each other in business, social and political activities.
    • Cross-cultural competence: Describes the individual's ability to recognize cultural differences and similarities, and to deal effectively with people across cultures.
    • Cross-cultural management: Knowledge, skills, awareness and competencies of managing across-cultures. According to the organizational theorist Nancy Adler, ‘cross-cultural management explains the behaviour of people in organizations around the world and shows people how to work in organizations with employees and client populations from many different cultures' (International Dimensions of Organizational Behavior, 4th edn, 2003, p. 11).
    • Cross-cultural sensitivity: Describes the individual's ability to understand and react swiftly and appropriately to the situations, conditions, behaviours and contexts of cultural differences. It requires a high level of cross-cultural awareness and competency.
    • Cultural convergence: Based on the idea that societies become culturally similar because of globalization, industrialization, information and communications technologies, and international education.
    • Cultural divergence: This is is the opposite of cultural convergence, and is based on the idea that societies become more culturally different because of increasing differences in belief systems, norms and values, educational opportunities, and political and economic systems.
    • Cultural diversity: A situation where there are differences in behaviours among a social group because of differences in ethnicity, race, nationality or belief systems.
    • Cultural identity: Refers to the common cultural norms and values by which members of a group or society can be identified. People identify themselves as belonging to a group or society when they share a common set of norms and values.
    • Cultural norms: A set of behaviours that are typical of specific cultures and by which members of groups develop their cultural identities. They can be learnt early in life from parents, teachers and the environment in which one grows up and interacts with others. Norms can be written or unwritten rules and ways of behaving in a particular social context.
    • Cultural values: The virtues by which a culture of a group can be identified. They can be forms of a belief system, behaviours, customs and relationships that people of a group value in their cultures.
    • Culture: There are many definitions of culture, but it is generally referred to as the shared norms, values, customs, traditions, rituals, arts, folklore, history, heritage and institutions of a group of people. For example, the sociologist Geert Hofstede defines culture as the ‘collective programming of the mind which distinguishes members of one group or category of people from another’ (Cultures and Organizations: Software of the Mind, 1991, p. 260).
    • Culture clash: When two or more cultures meet and their differences result in misunderstandings and a problematic working or social environment.
    • Culture shock: A state of anxiety, frustration and tension that is expressed physiologically and/or psychologically by a person when coming to terms for the first time with an unfamiliar cultural context and not knowing how to behave. People often experience it when they move from one country or culture to another.
    • Decentralization: A process whereby decision-making authority is transferred from the higher to the lower levels of an organization. It is the opposite of centralization and often associated with empowerment.
    • Democracy: A system where on the basis of majority votes, the people, either directly or through their representatives, decide what is to be done. In politics, governments are elected through public vote in fair, free and transparent elections.
    • Developing countries: This term is usually used interchangeably with terms like underdeveloped, less developed, third world, or poor countries, and they are also referred to as the ‘South’ or the ‘East’. Countries on the opposite end of the spectrum are termed industrialized, developed, or rich countries, and are simply summarized as ‘the West’.
    • Diffusion: A process of moving behaviours, policies and practices from one culture to another, either directly or indirectly, formally or informally. It can be forward or reverse diffusion. Forward diffusion involves developing a global employment strategy that enables local employees to learn the knowledge and skills that make them globally employable. Reverse diffusion is part of the national identification process as international managers are informed of the national characteristics of organization and management in different countries.
    • Discrimination: Actions and behaviours that can be seen as a denial of equal treatment, rights and opportunities in an organization or society. It is illegal in the laws of many countries to discriminate by making unjust distinctions that are based on race, age, gender, religion, political affiliation, marital status, colour, nationality, sexual orientation, and physical or mental disability.
    • Diversity: It is a recognition and understanding of individual differences in an organization and realization that individuals have their unique needs, abilities and potentials. It is often related to managing diversity.
    • Downsizing: A process of restructuring an organization by reducing the number of employees to increase organizational efficiency.
    • Economic growth: A country's increase in national income over a specific period because of growth in production and services as a result of increasing investments, and technological development.
    • Economic integration: When two or more countries agree to enhance their economic cooperation by increasing the level of trade and reducing or abolishing tariff barriers among them.
    • Employee relations: Used in broad terms to refer to the process of developing, maintaining and improving employee relationships within an organization by having direct and indirect methods of contact with employees.
    • Empowerment: A process of giving the workers the power to make decisions over their work.
    • Ethnic group: A group whose members share similar cultural norms and values, history, race, nationality and/or belief systems that make them different, to some extent, from other ethnic groups.
    • Ethnocentric: A belief in the superiority of one's own ethnic group over others. In managing across cultures, multinational companies prefer to have their managers from the home rather than the host country and to apply the home country organizational culture and management practices in their foreign subsidiaries.
    • Expatriate: A person who has left his or her own country to live and work in another country. In managing across cultures, expatriates are usually employees of multinational companies who move from the home country to live and work in the company's host country.
    • Family-friendly policies: Employment policies that may help employees to combine their work and family commitments. These include a wide range of provisions such as: 1) leave for family reasons like maternity and paternity leave, school holiday leave, wedding and funeral attendance, career breaks and sabbaticals, and breaks as a result of a problems or illness in the family; 2) Flexible working practices such as job sharing, part-time work, annual hours, home-based working, flexitime, and flexiplace; 3) Career break schemes to allow employees to take a break for a specific period and then return to work; 4) Care facilities such as child care, elderly care and disabled care; and 5) Special leave arrangements that are granted when employees need to be absent from work in circumstances not covered by sick leave, annual leave, maternity leave, family leave or flexible working arrangements.
    • Feminity: Masculinity/feminity is one of the sociologist Geert Hofstede's cultural dimensions. According to Hofstede, ‘Feminity pertains to societies in which social agenda roles overlap (i.e. men and women are supposed to be modest, tender, and concerned with the quality of life)’ (Cultures and Organizations: Software of the Mind, 1991, p. 83).
    • Flexibility: The concept of flexibility in employment refers, in general, to the process by which the time and patterns of work are arranged in a way that meets employees and employers' needs.
    • Flexible working practices: Work practices such as part-time work, job sharing, temporary work, flexitime, home-based working, etc. that are used by employers in order to retain their valued employees and to basically respond to their needs because they might otherwise have to leave their jobs. However, countries differ in their use of flexible working practices according to their social structures, cultures, employment laws and regulations, and their levels of economic growth.
    • Foreign direct investment (FDI): The investment of equity funds of an organization in other countries.
    • Freedom of association: Giving the right to workers to form and join trade unions and to bargain collectively. In most countries this right is protected by law.
    • Geocentric: When no culture is seen as superior than the other. Geocentric organizations are those that depend on international teams of managers regardless of their country of origin or nationality. Neither the host nor the home country culture dominates the process of making decisions in a geocentric multinational company.
    • Global market: International business environment, including international labour market.
    • Globalization: A disputed concept that is used to describe the causes of international transformations in society, economy and geography. Current perceptions and interpretations of globalization vary, not least because of the multi-disciplinary nature of the phenomenon: from the globalization of trade to the globalization of arts, language and types of food, there are almost as many conceptualizations of globalization as there are disciplines. In society, the sociologist Anthony Giddens sees globalization as ‘the intensification of world-wide social relations which links distant localities in such a way that local happenings are shaped by events occurring many miles away and vice versa’ (The Consequences of Modernity, 1990, p. 4).
    • Graduate recruitment: A process of searching for and obtaining potential job applicants from graduates in sufficient quantity and quality so that employers can select the most suitable candidates to fill in their job vacancies.
    • Grande école: in the French system of higher education, a grande école is a highly selective and prestigious school or institution from which the country's top managers and political leaders graduate. A grande école can be an école nationale or an école superieure.
    • Guanxi: A Chinese term which literally means ‘relationships' or ‘connections'. In practice, it is a reciprocal act of doing favours in the sense of a favour being repaid at some time after the original one is given, and because the original recipient may not have anything immediately useful to give to the donor in return. It is related to the confucius saying, ‘do not expect returns when you provide a service to others but do not forget when others provide a service to you’. Guanxi is very important in doing business with the Chinese.
    • Home country nationals or parent country nationals (PCN): The citizens of the country where the multinational company originates. They are also called expatriates.
    • Host country nationals (HCN): The citizens of the country where the multinational company has subsidiaries. They are also called the nationals or the local employees.
    • Illegal employment practices: Such as not considering the health and safety of employees, not paying employees their full wage entitlements, the employment of children, nepotism and corruption. They are very common in developing countries, especially in the small enterprises whose owners have no respect for and do not implement employment laws.
    • Immigrant workers: Are those who move to another country in search of employment and/or better standards of living.
    • Indigenous people: The native people of a land or territory that was later occupied or populated by people of foreign nationalities. For example, the aborigines are the indigenous people of Australia. The concept of ‘indigenous' is also used to refer to the locals or the nationals of a country.
    • Individualism: Individualism/collectivism is one of the sociologist Geert Hofstede's cultural dimensions. According to Hofstede, ‘individualism pertains to societies in which the ties between individuals are loose: everyone is expected to look after himself or herself and his or her immediate family’ (Cultures and Organizations: Software of the Mind, 1991, p. 51).
    • Informal sector: Is known as the underground, unreported, undeclared, and hidden economy because the activity is not declared as a tax-paying business and is not formally registered. It takes the form of street sales, backstreet stores, roadside stalls, door-to-door sales, under-the-table transactions, car boot sales, and so on.
    • International human resource management: Human resource management policies and practices used to manage human resources in organizations operating in different countries.
    • Japanization: The adoption of Japanese management techniques such as quality circles, total quality control systems, just-in-time and so on by companies in other countries.
    • Kaizen: In Japanese it means ‘continuous improvement’ involving all employees, and is linked to low-cost high-productivity manufacturing systems.
    • Keiretsu: In Japanese it means a group of companies with strong long-term associations. They are characterized by cross-shareholdings and having one main bank.
    • Labour force participation rate: The ratio between the economically active (all those currently employed and those looking for employment) and the nation's total working-age population.
    • Labour market: A geographical area (local, national international) or occupational sector (public or private) where labour is in supply and demand.
    • Liberalization: Implementing policies and procedures that reduce government controls on the economy and allow market forces to determine the level of economic activity.
    • Life expectancy: The length of time that a person can, on average, expect to live in a given society.
    • Localization: A process of replacing foreign employees with local ones. It was introduced in some Middle Eastern countries under the concept of, for example, Emiratization, Omanization, Saudization and so on.
    • Managing across cultures: Is a two-way process that involves national and international employees and employers of different organizations in different countries and cultural settings. It can be defined simply as the process of managing local employees globally and global employees locally. Every employee is expected to act locally and think globally. Understanding this process leads not only to gaining knowledge of different national contexts and to comparing them, but also to learning the knowledge and skills of managing resources internationally in different national contexts.
    • Managing diversity: The treatment of all employees on an individual level. Managers recognize that differences in people can bring value to the organization when employees are given individual consideration with individual solutions to their particular needs. As Kandola and Fullerton (Managing the Mosaic, 1994: 8) state, ‘harnessing these differences will create a productive environment in which everybody feels valuable and their talents are fully utilised in such a way that organizational goals are met’.
    • Market economy: An economy determined by the law of supply and demand in the allocation of resources and where businesses are mainly in private ownership. It is often referred to as free market economy and is the opposite of the command or planned economy.
    • Masculinity: Masculinity/feminity is one of the sociologist Geert Hofstede's cultural dimensions. Hofstede (Cultures and Organizations, 1991: 83) defines masculinity as it ‘pertains to societies in which social roles are clearly distinct (i.e. men are supposed to be assertive, tough and focused on material success whereas women are supposed to be more modest, tender and concerned with the quality of life)’.
    • Mercosur: In South America, a subregional free trade association that was formed between Argentina, Brazil, Paraguay and Uruguay to promote economic cooperation.
    • Minimum wage: The statutory minimum pay that is determined by government as the lowest level of earning per hour or month.
    • Multiculturalism: The view that is based on the principle of cultural diversity of different nations as distinctive cultural identities. Different cultures and ethnic groups are formally recognized and legally protected from discrimination.
    • Multinational Enterprise (MNE): A company that has its headquarters in one country and operates in different countries. They are also referred to as Multinational Companies (MNCs) or Transnational Companies (TNCs).
    • Nation: A social grouping of people related by a common history, heritage, language, norms and values, legal system, territorial homeland and objectives. It is also used to mean a country or a nation-state when it has its own administrative, judicial and political systems by which it can be identified.
    • Nepotism: The act of favouring relatives and friends in employment, promotion, treatment and pay by those in positions of authority and power.
    • North American Free Trade Agreement (NAFTA): A regional free trade agreement between Canada, Mexico and the United States.
    • Organization for Economic Cooperation and Development (OECD): An international organization of 30 industrialized and industrializing countries that provides a forum for the discussion and dissemination of information on economic, social and political issues, and monitors the economic performance and policies of its member states.
    • Organizational culture: The shared values of employees, rules and procedures, policies and strategies, images and symbols, and the vision of management that together make the organization. In managing across cultures, the type of organizational culture concerned is ‘corporate culture’ which is characteristic of multinational companies whereby the culture of the headquarters influences that of the subsidiaries and vice versa.
    • Outsourcing: Seeking human resources from outside the business to get some non-core activities such as building maintenance and cleaning, computer services, security, payroll, transport and training, temporary employment, printing, catering, recruitment, etc. done by other providers.
    • Particularism: Universalism versus particularism is one of the cultural value dimensions proposed by Trompenaars and Hampden-Turner (Riding the Waves of Culture, 1997). This dimension concerns the extent to which behaviours and rules are applied universally or specifically to particular situations. In particularist societies people tend to be more relaxed with the application of rules and recognize the unique circumstances around a particular rule.
    • Paternalistic management: A management style where managers treat employees as members of their families. Paternalism is common in African, Arab and Chinese cultures.
    • Performance appraisal: A periodic process of identifying, evaluating and discussing the performance of an employee with the aim of making future developmental and reward decisions.
    • Performance-related pay: Is a reward policy that links an individual's pay to his or her performance. Normally, the better the performance, the higher the pay.
    • Political instability: Occurs in countries where governments are unstable because of civil war, social and political conflict, corruption, religious tensions and wars.
    • Polycentric: The opposite of ethnocentric is polycentric, where the host country management is preferred over the use of expatriates. Subsidiaries are treated as distinct national entities with some decision-making autonomy. They are managed with a minimum of intervention from the headquarters personnel.
    • Power distance: Large versus small power distance is one of the sociologist Geert Hofstede's cultural dimensions. Hofstede (Cultures and Organizations, 1980) argued that societies differ from one another in the extent to which power and authority are exercised among people. Power inequality is more tolerated in some societies than in others. The level of power differentiation (or distance) is influenced by national norms and values concerning status, wealth, gender, age, religion, race and education.
    • Pragmatism: Not showing emotions of anger or satisfaction to others. A common attitude is that what is good can be better and what is bad can be worse.
    • Repatriation: The process of an expatriate returning home after the completion of an overseas assignment. It involves the re-induction and the re-integration of the expatriate to his/her former working and social environment.
    • Strategic alliances: The formation of working partnerships between multinational firms operating in different countries with the aim of strengthening their international market positions.
    • Strategic awareness: Being aware of the importance of linking organizational policies and procedures to corporate strategies and objectives.
    • Stratification: A situation where there are social divisions based on unequal access to resources and unequal distribution of wealth and power in a society.
    • Third country nationals (TCN): Citizens of countries other than the host or the home country of a multinational company.
    • Trade unions: An organization of workers that is usually related to the type of work they do and its aim is to bargain collectively with the employer for better terms and conditions of employment.
    • Trade union density: The ratio of the workforce that is a member of trade unions.
    • Ubuntumanagement: A people-centred and less rationally determined African management style that is generally characterized by a strong emphasis on the importance of family and tribe, kinship relations and nepotism, and respect for age and seniority, where relationships are based on trust and are valued over achievements and organizational performance.
    • Uncertainty avoidance: High versus low uncertainty avoidance is one of the sociologist Geert Hofstede's cultural dimensions. Uncertainty avoidance concerns the extent to which people in a culture feel nervous or threatened by uncertainty and ambiguity and create institutions and rules to try to avoid uncertainty.
    • Unemployment: The ratio of the labour force who are willing to work but cannot be employed.
    • Wasta: The practice of nepotism and favouritism in Arab countries is known as wasta or ma ‘rifa (in Arabic). It is also known in Algeria, Tunisia and Morocco as ‘le piston’ (in French). The concept of wasta literally means to go between, and ‘le piston’ is the bolt that holds parts of an engine together, but in practice both concepts imply a type of favouritism and nepotism.
    • Welfare state: The provision of social benefits from public funds to citizens with low or no income. Such benefits include a free or subsidized health service, education, transport and accommodation, as well as social security payments.
    • Westernization: A process of adopting and adapting to Western cultures and free market economic modes.
    • Works council: A workers' representative body at the workplace which normally involves representatives from management, workers and trade unions to establish a two-way communication: employees–management and trade unions–management.
    • World Trade Organization (WTO): An international organization which regulates international and multilateral trade agreements among its member states and settles trade disputes between them.
    • Zaibatsu: In Japanese, are the old forms of keiretsu, which are similar to Korean chaebol (q.v.).

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