Is culture really all that International Human Resource Manager is about?

* Introduction * Diversity Management * IHRM & Culture issue * Conclusion * References

Introduction People have always been the driving force of business and management. This force is a challenge and if not addressed with the right skills, it will develop into disturbing elements that are very dangerous for the management of the company. The challenges of global talent selection and mobility of labor, established by a career concept that transcends national borders and organizational groups and the emergence of virtual collaboration on international projects requires companies to develop new skills in their employees to be effective in the complexity of today's contexts. The workforces are people, and as we are human, we are all different from various points of view. This paper aims to answer the question: “Is culture really all that International Human Resource Manager is about?” I’ve analyzed the differences between HRM and IHRM based on the concept of diversity, characteristics that influence both topics but in a different way. After this, the next stop is to define IHRM and the concept of culture to reach the conclusion that managing cultural differences in an international team is the major challenge to IHRM. Due to the movement of employees between foreign subsidiaries and headquarters and between foreign locales, HRM professionals are likely to find themselves working on international assignments. Managers working in their home countries but employed by a local subsidiary of a foreign MNE, will have to integrate a local culture and organizational culture into the local operation. The different communication styles, worker motivation philosophies, and organizational structures and frequent lack of understanding of the host country cultures, can cause major problems for the local HR manager, and thus forces the host country HR manager to confront aspects of internationalization (Briscoe, Schuler, 2004). IHRM has to handle the multiple countries and cultures confronted in the global environment. Policies and practices in multicultural and cross-cultural environments have to be ran with an international mindset.

Diversity Management Thomas (2005) sums the situation up by observing that diversity in business has for too long been associated with multicultural, multiethnic and multiracial aspects of the workforce. He defines diversity as “any mixture of items characterized by differences and similarities” (Thomas, 2005, p.89). To drive the workforce in a good way to achieve the company’s goals, HRM departments have to take care of the diversity. It is the same for an IHRM and this could be more challenging. In both domestic and international HR, it is essential for managers who want to have good feedback from their activities, to follow a management line based on diversity. That is why I thought it might be interesting to define the ‘diversity manager’, an activity useful to domestic and international HR managers. The term "diversity management" dates back to 1987, when the Hudson Institute published the report Workforce 2000: The report informed the Americans that by 2000 the majority of their workers would been American, African, Hispanic and Native American, woman, and all those belonging to other "minority groups". This news surprised many American businessmen who, alarmed, began to address the problem of exploitation and maintenance of their talents, belonging to races, religions, ethnic groups and different lifestyles (Lorbiecki, Jack, 2000). Loden & Rosener (1991) define diversity as what differentiates one group of people from another along primary and secondary dimensions. Primary dimensions of diversity, those exerting primary influences on our identities, are: gender, ethnicity, race, sexual orientation, age and mental or physical abilities and characteristics. The primary dimensions shape our basic self-image as well as our fundamental worldviews. Additionally, they have the most impact on groups in the workplace and society. Secondary dimensions of diversity are less visible, exert a more variable influence on personal identity and add a more subtle richness to the primary dimensions of diversity. They include: educational background, geographic location, religion, first language, family status, work style, work experience, military experience, organizational role and level, income and communication style. The complexity involved in operating in different countries and employees is a variable key in differentiating domestic and international HRM. What really distinguishes the management of human resources domestic (HRM) from the management of people employed in an international organization (IHRM) is the addition of complex elements arising from different national contexts, the linguistic and cultural differences that need to be managed simultaneously and effectively (Dowling,2008). According to Stahl and Morris (2012), IHRM involves the same activities and dimensions as domestic HRM but operates on a much larger scale, with more consideration to complex strategies. What I find interesting is how the classification of diversity, due to the many aspects of it, could affect the activities of an HRM. ‘Diversity’ is a term that concerns several aspects, such as age, gender, believes and values. All aspects that influence domestic and international HRM. Therefore, the most important thing is to understand the difference between HRM and IHRM with the purpose of tracking the main issues that an international HR faces in its everyday management: cultural diversity in an international firm. International Human Resource Management and Culture issue.

In the current economic situation, where companies conduct at least one stage of the business in a foreign country, the activities of Human Resource extend their competences internationally.
According to many researchers, ‘International Human Resource Management’ has become an important part of any organization. Globalization is today one of the main pillars of any company with international activity.
Levitt(1983) defined Globalization as the changes in technology and social behaviors that allow multinational companies, like Coca-Cola and McDonald's, to sell the same products worldwide. The term ‘globalization’ has spread to all aspects of management, including the HR department.
The opening of new markets and the increasing production capacity in the emerging countries, have led to a process of internationalization that the activity of human resource management cannot escape from.
Indeed, a transformation in this type of activity is guarantee of success in achieving greater competitive advantage on a global scale.
The internationalization process is an opportunity for development, so that the company can create value, remunerate the resources invested, extend their competitive advantage and get new resources for their own growth.
A company that decides to undertake a process of internationalization needs to define and implement policies for the management of human resources and align them with the growth strategy. The adoption of global patterns make the human capital management more critical, due to the several cultural differences typical in an international team.
A large number of scholars have suggested that the International HRM is still at the infancy stage (Laurent 1986); while others argue that there is now a solid base of knowledge and practices of personnel management at international level. In any case, the study of topics related to this issue is very difficult, because the researches made at a multinational level are very expensive, require more time, more language skills, sensitivity to different cultures when they get in contact and finally cooperation between different companies, countries and governments.
Morgan (1986.p 44) defines IHRM as the interaction among three dimensions: 1. human resource activities, 2. type of employees, 3. Countries of operation.

According to Dowling, Festing & Engle(2008), the countries involved in IHRM are categorized by * the host-country where a subsidiary may be located; * the home-country where the firm is headquartered; * ‘other’ countries that may be the source of labor, finance and other inputs.
In addition, there are three major categories of employees of an international firm: * host-country nationals (HCNs) * parent-country nationals (PCNs) * third-country nationals (TCNs).

Although there are many differences between the various States of the world; from culture (language, forms of interaction and communication between people) to politics (laws, policies and institutions), geography (existence of common borders, distances internal) and economy (economic activities specific to each country), the challenge has now become to quickly try to overcome these barriers. ‘The International Human Resource Management’ is a dynamic and extremely complicated strategy, because there are many variables to be considered when analyzing it. However, these variables are often closely related to each other, considering the cultural diversity as the main keyword; therefore, the organization needs to delegate the management to experts of the Human Resource to create ad-hoc functions. We clearly need to link IHRM and culture, keeping our focus on the meaning of culture and on the other topics related to the term ‘culture’.
Every day, any employee or manager interacts with other more or less different people. The experiences, prejudices and many other thoughts that could complicate management all come from their interactions.
This could increase when people across national boundaries work together and interact in socialization processes. That’s why it is essential to take a closer look at cultural differences.
Dowling, Festing & Engle ( 2008,pp.9-10) assert that “there are many definitions for what culture means, however the term is usually used to describe a shaping process over time. An important characteristic of culture is that it is so subtle process that one is not always conscious of its effect on values, attitudes and behaviors”. “Culture is the way in which a group of people solves problems and reconciles dilemmas” (Trompenaars & Turner, 1998, pp. 6)
Also according to Kotelnikov (2007), culture concerns beliefs and values in which people base their interpretation of experiences and behave, individually and in groups. Cultural statements become operationalized when executives articulate and publish the values of their firm, which provide the patterns to determine how employees should behave.
Firms working in international environment, often, have to confront with team of employees from different countries and with different cultural backgrounds.
Managers are often confronted with the concept of diversity cultures and multiculturalism. We then need to define these two issues to better understand the difference between the two.
Jackson (2002) argues that cultural differences are significant and multinational companies should take them into account in their communication and interaction across nations.
According to Cox (1994), cultural diversity means the representation, in one social system, of people with distinctly different group affiliations of cultural significance, likewise.
Multiculturalism means collaborative participation among multiple cultures in one social system to share their mutual understanding to lead the whole social system towards a meaningful achievement for all (Parhizgar, 2002).
In cultural diversity, there are majority and minority groups, but in multiculturalism, there is no stratification of people based on race, color, ethnicity, and nationality (Narkhed, 2002).
Many firms continue to underestimate the complexities of managing human resources across borders, which often results in poor performances in international operations (Scullion, 2005).
The Cultural issue could create conflicts between team members from different countries, due to differences in behavior, values and institutional environments. That’s why international firms need a manager with the right skills to develop the diversity to benefit the organization.
In an international environment, most of the managers are not able to communicate with their employees, because of the increasing of global teams (Bush and Ingram 2000). Therefore, they should stress the importance of understanding that one culture is not better than another at a political level; IHRM, in international firm, has to be able to supervise potential activities of discrimination, prejudice and bias that could affect the performance and thus, the teamwork.
Briscoe(2004), has highlighted four specific problems to develop a global view:
• Explicitly recognize how home-country ways of managing human resource are a function of cultural values and assumptions,
• Recognize that these ways are neither better nor worse than others around the world
• Take action to make cultural differences discussable, and therefore, usable.
• Develop a genuine belief that more creative and effective ways of managing human resources can be learned from other cultures.
Keep a high sensitivity on culture diversity to have awareness of differences; cross-cultural knowledge and awareness can assist managers to improve management skills and help business leaders make the right strategic decisions (Zhao Shuming, 2006).
Managing the cultural issue in the right way could have an impact on competitive strategies to get advantages and high performances.
IHRM should consider the structure of the human resource in the working team to adjust and relocate it, based on the different forms of culture existing in the team.
Employees from diverse backgrounds and culture bring individual aspirations and values in the workforce that need to be harnessed and managed, to give better contribution of the success of the company. Thus is responsibility of the IHR Managers to identify, cultivating, training and developing the skills of the future global leaders (Priya M. & Uma Maheshwari, 2010).
This is the most important challenge for IHRM: breaking up the cultural wall to avoid the emerging of subgroups (Earley & Mosakowski, 2000). This can be done by building bridges within culturally different teams, organizing team-building social events, facilitating cross-cultural social interaction among team members from diverse cultures (Gibbs, 2006).
IHRM, managing across-culture, plays the most important role, for instance in dealing with the issue of culture-distance. Cao, Hirschi and Deller (2012, p167) 22define cultural distance as the ‘basic differences between cultures, such as value systems, beliefs, customs and rituals in addition tolegal, political and economic systems’
Managing tasks, bringing the focus on cross-cultural relations is the first step to overcome the uncertainty and its consequences (Tung & Verbeke, 2010).
International businesses have increased their attention on expatriates, which are employees being transferred by organizations to work outside their countries of origin, managing in other cultures and managing diversity in multicultural team.
Helena Karjalainen’s case of study is very useful to understand the role of multicultural factors and the difficulty of managing multicultural work groups for IHRM.
She examines the case of ‘Prometheus’: a global information company providing information for the financial services, media and corporate markets.
This company has 200 agencies in 130 countries, employs around 15 000 members representing 123 nationalities and working in 19 languages.
Karjalainen divided the workforce in T1 members interact permanently; in T2 and T5 interactions are not permanent but frequent because members still share the same open space office; and T3 and T4 work together virtually.
The first group (T1) is the only permanently based group in Luxembourg and Brussels. All employees work together and this situation create interactions between employees.
The stable situation between employees from different cultures (American, Luxembourg, Belgian Flemish and French) can be explained by the fact that the group size is limited. Social and cultural proximity helps to create certain common motivations, emotions and values.
T2 and T5 present quite a different situation, as they are composed by engineers, who are mobile. Due to this working situation, the interactions between employees are more limited. In this group, cultural differences seem to be balanced because the differences are more related to their profession than to different nationalities present in the group.
T3 and T4 employees working far away from their collaborators and meeting each other rarely. Their communication is 80% non verbal; in this case the variable culture can create more problems because it misses the face-to-face interaction sometimes necessary to understand colleagues from different cultures.
Part of her study of Prometheus shows how cultural differences could affect the communication between people with different background and how the cultural issue increases in relation to the team of the people working.
Thus, IHRM has to be a mediator, to prevent conflicts and maintain cooperation or to create cooperation between employees representing different cultural backgrounds.
All these activities have to be carefully addressed by who has the skills to do it, like IHRM, that holds the "power" and the abilities to do so. Addressing the cultural issue is a difficult task, but it is the main responsibility of IHRM.
Conclusion
IHRM has to be a strategic business partner for international companies. IHRM tends to be more focused on interdisciplinarity and to cover considerably more topics, such as managing diversity, corporate citizenship and new models of expatriation. Topics very much intertwined with the culture issue.
There are many obstacles to intercultural communication, which is why the role of the HRM is very important to break all the barriers. Teams cannot begin to enhance communication without first recognizing, then understanding and respecting cross-cultural differences. Throughout the whole process, IHRM has to be the guide and tool used to achieve the goals set by the multinational companies.
That is why dealing with the issue of the managing cultural diversity is essential for IHRM. The performance of a company goes hand in hand with the group work, the practices of expatriation and the management of new markets. All these activities involve a human capital formed by different people, who, day by day, confronts themselves with other cultures, within the team and the social context around the company.

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