Culture plays a significant role in influencing the ways in which people are managed. This is the reason why cultural differences mandate different management practices. It is believed that Human Resource Management (HRM) practices are the most vulnerable to the cultural differences having significant implications for the appropriateness and design. International HRM has proposed that cultural differences result in varying individual preferences and perceptions that give shape to organizational behavior along with work motivation; conflicts; communications; defining goals; work-orientation; rewarding and performance appraisal, management styles and decision making. Some of the economic theories have also realized the significance of culture in giving shape to behaviors of institutions and individuals. It has been proposed that other than formal, the context of informal institution influences governance structures which coordinate the individual actions taking place within the firms.

The significance of studying cultural differences with respect to HRM policies and practices in relevant practices and literature is twofold. Rising cultural diversity due to internationalization of global economy indicates that the global organizations are the most challenging context for implementation and designing of the integrated and unusual HRM practices and policies which address the cross-cultural concerns. Cultural differences on the other hand are significant for studying HRM practices and policies within a comparative context. It has been argued that the concept of HRM is supported largely in the U.S. but is not practiced or espoused anywhere else within Europe along with the transition economies.

Rising workplace diversity results in greater challenges for both the interviewees and interviewers. Changes in the nature of workforce demography might result in changing