Transcript Topic 9: A cross-cultural perspective on managing diversity

A Cross-Cultural
Perspective On Managing
Diversity
International Human Resource Management
IBUS 618.02
March 12, 2005
Khemais Boujema
Azza Hararah
Michel Harms
Stefanie Schmidt
Agenda
• Introduction
Comparison: United States and United Kingdom
(Stefanie)
• Managing Diversity
The Transition from HRM to IHRM
(Khemais)
• “Bridging the Gap“
Practical Issues and Implications
(Azza)
• Case Study: Pfizer and AstraZeneca
Recap
(Michel)
Country Profiles: UK and US
Country Profiles: UK and US
United Kingdom
United States
• Area: 244,820 sq km
• Population: 60,270,708
= 646 per sq mi
• Area: 9,631,418 sq km
• Population: 293,027,571
= 83 per sq mi
• Age structure:
• Age structure:
– 0-14 yrs: 18 %
– 15-64 yrs: 66.3 %
– 64+ yrs: 15.74 %
• Pop. growth rate: 0.29 %
• Fertility rate: 1.66
– 0-14 yrs: 20.8 %
– 15-64 yrs: 66.9 %
– 64+ yrs: 12.4 %
• Pop. growth rate: 0.92 %
• Fertility rate: 2.07
Country Profiles: UK and US
United Kingdom
United States
• Ethnic groups:
– White: 92.1 %
– Black: 2 %
– Asian: 4 %
– Other: 1.9 %
• Ethnic groups:
– White: 77.1 %
– Black: 12.9 %
– Asian: 4.2 %
– Native: 1.8 %
– Other: 4 %
• Religions:
– Anglican / Roman Catholic:
66.4 %
– Muslim: 2.5 %
– Presbyterian: 1.3 %
– Methodist: 1.3 %
– Sikh, Hindu, Jewish: 2.2 %
– Other / None: 26.3 %
• Religions:
– Protestant: 52 %
– Roman Catholic: 24 %
– Mormon: 2 %
– Jewish, Muslim: 1 % each
– Other: 10 %
– None: 10 %
Country Profiles: UK and US
United Kingdom
United States
• GDP: $ 1.66 trillion (2003)
• GDP real growth rate: 2.2 %
• GDP per capita: $ 27,700
• GDP: $ 10.99 trillion (2003)
• GDP real growth rate: 3.1 %
• GDP per capita: $ 37,800
• Pop. below poverty line: 17 %
• Household income:
– Lowest 10 %: 2.3 %
– Highest 10 %: 27.7 %
• Pop. below poverty line: 12 %
• Household income:
– Lowest 10 %: 1.8 %
– Highest 10 %: 30.5 %
Country Profiles: UK and US
United Kingdom
United States
• Labor force: 29.6 million
• Labor force: 147.4 million
• Labor force by occupation:
– Agriculture: 1 %
– Industry: 25 %
– Services: 74 %
• Labor force by occupation:
– Agriculture: 0.7 %
– Industry: 22.7 %
– Services: 76.7 %
• Unemployment rate: 5 % (2003)
• Unemployment rate: 6 % (2003)
Geert Hofstede
Cultural Dimensions
• Power Distance (PDI):
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degree of equality / inequality between
people in the country´s society
Individualism (IDV):
extent to which the society reinforces
individual or collective achievement
and interpersonal relationships
Masculinity (MAS):
extent to which the society reinforces
the traditional masculine work role
model of male achievement, control,
and power
Uncertainty Avoidance (UAI): level of tolerance for uncertainty and
ambiguity within the society
Long-term Orientation (LTO): extent to which the society embraces
long-term devotion to traditional, forward
thinking values
Geert Hofstede
Cultural Dimensions
UK:
35 – 89 – 66 - 35 - 25
US:
40 – 91 – 62 – 46 – 29
World Average:
55 – 43 – 50 – 64 – 45
Managing Diversity and
the Transition from HRM to
IHRM
Literature Review
Diversity In The U.S. And The U.K.
The workforces in the United States, and the United Kingdom, are amongst
the most racially and ethnically diverse in the world.
“..and it is now projected that by the year 2050, the population of the U.S.
will be evenly split between whites and non-whites” (Cox, 1994).
Managing Diversity
Managing diversity is an active phenomenon—it involves supervising or
coordinating the differences of individuals with diverse backgrounds to
ensure that the organization’s goal are effectively met.
“A way of thinking' toward the objective of creating an environment that will
enable all employees to reach their full potential in pursuit of
organizational objectives". (Thomas, 1991)
Implications For IHRM
Managing diversity is at the core of the transition from HRM to IHRM.
International HRM involves:
• The need for a broader perspective
• More involvement in employee’s personal lives
• Risk exposure
• Broader external influences
The Multicultural Organizations
Literature findings suggest that multicultural organizations are more
productive because they:
• Are more able to recruit and retain culturally diverse staff
• Increase their ability to attract new clientele
• Create new work and management styles
• Develop new patterns of personal relationships
• Build structures that better meet the need of diverse staff and clientele
Flaws In The Existing IHRM Literature
The dominant IHRM literature is increasingly unsustainable in a rapidly
globalizing business environment
• Much of the existing IHRM literature is old
• Much of the early research into IHRM was predicated upon limited or
non representative samples
• The business environment is changing rapidly
Earlier Assumptions
Earlier perspectives of IHRM theories include some underlying
assumptions:
• IHRM is essentially concerned with the management of long-term
Western PCNs employed by multinational companies
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The ‘failure’ rates for such expatriates are extremely big
• The ‘hardship’ of international relocation demands considerable
‘compensation’ (especially financial) to encourage Western Expatriates
to accept such assignments
Wrong Assumptions!
The previous assumptions are not valid today because:
• The term ‘expatriate’ has a broader definition that includes short term
and frequent travelers which only few studies have centered on
• Several authors have suggested there is little evidence to support the
the validity of high expatriate ‘failure’ rates and sharply criticized the
data collection methods used in many of the important research studies
• A recent survey by Foster-Higgins (1996) reported that 34% of their
respondents had actively reduced expatriate payments. Another study in
the same year found that 31% of their 351 multinational companies
provided no foreign service premiums (Sheley, 1996:64)
New Approaches To IHRM
• Innovative international staffing techniques--use global staffing and
recruit the best within and outside the country
• Moves towards ‘flexpatriate’ payment systems (Senko, 1990; Dolins,
1998), and away from fixed expatriate packages based upon salary
adjustments and allowances
• Accommodate a ‘staged’ approach to the selection and preparation of
international staff appropriate to their level of interaction with the hostcountry
“Bridging the Gap”
United States & United Kingdom
Practical Issues & Implications –
Everyday Life
Reality Check
 Highest number of failed int’l assignments involve
Americans in UK and Britons in the US
 Companies invest in training primarily for countries
where English is not official language
 Expectations of similarity can set-up expats for failure
and underachievement
English-to-English Dictionary
Now What Did You Really Say…
British Say…
Americans Say…
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Holiday or hols
Bank Holiday
To table (an idea)
To put aside
To strike out
To fail
To knock-up
Pear-Shaped
Up to you really
Vacation
National Holiday
To put out for discussion
To table
To go after something
To strike out
To visit
Disaster
Don’t do it/Reconsider
HR Magazine December 2004
Communications Styles
AMERICANS
•Loud and clear
•Speak one’s mind
BRITISH
•Understated and indirect
•Much of what they mean is in
what is NOT said
Perceptions
VS
AMERICANS VIEWED AS:
• Over-the-top
• Pushing
• Difficult to work with
• Hire and Fire Culture
• Enterprising
• Arrogant
• Superficial
• Uncultured
BRITISH VIEWED AS:
• Phlegmatic
• Imperialist
• Isolationist
• Overly cautious
• Consensus oriented
• Constantly seeking
approval
• Unreliable - near perfect
record for late delivery
Communication & Work Style Challenges
British with Americans
• British harbor a degree of mistrust towards Americans in
the workplace
• American enthusiasm – always coming up with the
solutions, even when solution not asked for
• What else drives the British crazy…
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American Ambition
Tendency to speak one’s mind
Emphasis on getting things done – the faster the better
Willingness to take risks – “Just Do It”
Communication & Work Style Challenges
Americans with British
• Americans are easily frustrated with British need for
consensus and cautious approach to making decisions
• British “live and let live” approach at odds with American
intensity
• Meetings are a big source of frustration for Americans:
– British approach to decision making
– British tendency to sit quietly while one or two key people make
decisions
– British hesitation to push forward new ideas
A Case Study
Pfizer & AstraZeneca
AstraZeneca (U.K.)
• Workforce in over 25 countries
• Over 50,000 employees
Company Awards
• 46th best company to work for (2002)
• One of the 'Best Places to Work (2003 )
• 5th top employer in Science Magazine (2004)
• Ranked top 10 of most desirable company (2004)
• Lead the top 10 Companies for Executive Women
“Chemistry is a useful and
transferable skill"
• International assignments are encouraged
• Project work that requires traveling
• Taking assignments overseas
• 6 months – 2 years
AstraZeneca’s Policy
• Equal opportunities
• Open management
• “Total Rewards” strategy
– competitive base & incentive pay
– generous health and welfare benefits
– healthy work/life balance
– opportunities for growth, creativity and development.
Total Reward Strategy
Diversity
Three different areas
• Marketplace
– Programs to address different communities
• Workforce
– Increase visible diversity
• Workplace
– Employee Network Groups (ENG`s)
Pfizer (U.S.)
• Workforce in over 60 countries
• Over 122,000 employees
• Majority works outside U.S.
Global Perspective
• Combination of racial and gender diversity with thought
and perspective
• Defining global employees’ value proposition
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Identifying key rewards that employees value
Building competitive compensation & benefit programs
Creating common language
Assessing and improving “work content”
Increasing commitment
• Attending various diversity conferences
• Cross-pollination of learning
Diversity
• Popular among African-Americans
• Special recruitment programs
• Partnerships with HBCU’s
• Relocation programs
– Cross cultural counseling & language assistance
– Focus on the spouse
– Package deals
Recap
• Managing diversity is supervising and coordinating people´s differences
to give the organization a competitive advantage
• The existing IHRM literature is not keeping pace with the change in the
international business environment
• Today´s IHR professionals have to adopt new and innovative
approaches for staffing, compensation, and training
• Companies that invest in training do so primarily for countries where
English is not the official language
• YET the highest number of failed assignments involve Americans and
Britons
• AstraZeneca and Pfizer are excellent benchmarks on how diversity can
be well-managed
The End
Thank you all! ;-)
Questions ?