International HR and Cultural Differences

Introduction and Course Overview

The lecture begins with gratitude towards students for their participation in the quarter.
The focus shifts to International Human Resources (HR) and organizational structures across different cultures.

Icebreaker Questions on Cultural Nuances

Business Card Etiquette

The initial question revolves around cultures where bowing while accepting a business card is recommended.
Initially, the lecturer suggests Ethiopian culture, contrasting it with the common one-handed practice in the U.S. and India.
A student challenges this, citing personal experience that the practice is not commonly followed in India which the lecturer accepts as a valid point.
The discussion clarifies that the exchange of business cards in many cultures is a ceremonial show of respect, not merely a practical exchange of information.

Entering Business Meetings

The discussion shifts to cultures where entering a business meeting should occur in order of rank.
The lecturer initially suggests structured business environments might follow this which the student uses to build up his answer.
The correct answer is Iranian culture, although the lecturer admits India may also follow this pattern.
It's emphasized these are generalizations, representing trends rather than rigid stereotypes applicable to every individual in a culture.
Western influence may alter these trends, highlighting the importance of cultural sensitivity and awareness.

Gift-Giving in Negotiations (South Korea vs. the U.S.)

A story illustrates a South Korean businessman offering increasingly valuable gifts to an American negotiator.
The American negotiator, wary of bribery, declines each gift, causing confusion and potential offense.
The South Korean negotiator viewed the gifts as a sign of respect and relationship-building, in line with his cultural norms.
This highlights the cultural clash between American concerns about integrity and South Korean traditions of gift-giving to establish rapport.

Name Conventions in Singapore (Singapore vs. the U.S.)

A U.S. firm, eager to impress a Singaporean company, meticulously researches the names and faces of the Singaporean executives.
The American lead, intending to show respect, addresses everyone by what he believes to be their last names.
Unintentionally, he uses their first names, a faux pas in many East Asian cultures where the family name comes first.
For example, Carissa You would be addressed as You Carissa, and calling someone by their first name is perceived as too informal and disrespectful.

Takeaways from the Anecdotes

While some aspects of business are universal, cultural differences significantly impact interactions.
The importance of not reducing cultural understanding to stereotypes but being prepared to respect diversity is emphasized.
Simple actions, like a handshake, can convey different meanings in different cultures (e.g., firm handshake in the U.S. vs. a slight bow in other cultures).

Practicalities of HR from an International Perspective

Defining the Employer

The employer is defined as the entity with the right to direct and control an employee's activities, not necessarily the one who pays them.

Example Scenario: Neon Light Installation at Target

Carissa's hypothetical neon light business is contracted by Target to install neon lights.
Despite Target paying Carissa, they may not be considered her employer because they don't control her day-to-day activities or methods.
If Carissa's negligent installation causes an accident, Target's liability is limited due to the separation between the company and the contractor.

Implications for International Operations

Companies working abroad may engage individuals who aren't direct employees, affecting liability and control.
Consider an American tailoring company, Grace Stitches, sending employees to Taiwan and how it affects employer/employee relationships.

Options for Employing Personnel Abroad

Remaining Employees of the U.S.-Based Company

American employees sent to Taiwan could remain employees of the U.S. company, allowing Grace Stitches to maintain control over their activities and standards.

Employment by a Subsidiary

Alternatively, they could be terminated and rehired by Grace Stitches' subsidiary in Taiwan, shifting the employer responsibilities.

Dual Employee Arrangement

A dual employee arrangement is possible where individuals work for both the U.S. company and the Taiwanese subsidiary simultaneously.

Loaned Out Services

Another option is for employees to be employed by the U.S. company but loaned out to an overseas entity, similar to a contractor arrangement.
The character Emily in the show "Emily in Paris" is cited to illustrate this arrangement, where she works for a French subsidiary while remaining an American employee.

Considerations for Hiring in Different Countries

Companies may need to register locally to directly employ individuals in some countries.
Three options exist: establishing a local corporate presence, partnering with a third-party agency, or hiring independent contractors.

Local Corporate Presence

Establishing a local corporate presence involves setting up a registered branch, establishing a bank account, and directly employing individuals.
This provides the most control over employees but requires significant setup and commitment.

Partnering with a Third-Party Agency

Partnering with a third-party agency allows companies to avoid setting up a local office, with the agency handling employment and HR functions.
Companies like Patagonia and Nike use this model, partnering with factories in other countries.
However, this can lead to ethical issues. Nike was called out for poor treatment of workers within their contractor factories. Although these companies don't own the factories, they are able to enforce certain standards for employee treatment if they so choose.
Patagonia discovered human trafficking and slave trafficking occurring within their factories. They chose to renegotiate their relationship with the factories. The factory needed to provide higher discretion to employees in order for the relationship between Patagonia and the factories to work.

Independent Contractors

Hiring independent contractors involves engaging individuals who are not employees of the company or any agency.
This offers flexibility but less control and potential liability if the contractors are misclassified as employees.
If control is exerted over the contractors' behavior (e.g., setting hours or requiring uniforms), they may legally be considered employees.

Tailoring Hiring Strategies Across Cultures

IBM is highlighted as an example of a company that adapts its hiring strategy to suit local cultures.

Examples of IBM Hiring Strategies

In India, IBM conducts on-campus coding competitions, offering internships to winners.
In Germany, IBM emphasizes technical skills and expertise in job postings, reflecting the German emphasis on precise engineering.
In China, IBM may conduct interviews with the entire family of a potential employee, reflecting the cultural importance of family input.
In Brazil, IBM uses group interviews to assess collaboration skills, aligning with the cultural emphasis on teamwork.

Core Cultural Differences: Communication, Time Orientation, and Organizational Culture

Communication Styles: Direct vs. Indirect

It's emphasized that there are different cultural differences, which can be organized under formal/informal, and goal of the culture. Also high versus low context is mentioned, but not heavily emphasized.
Direct communication involves explicit and straightforward messages, while indirect communication relies on hints, implications, and nonverbal cues.
In the U.S., messages are typically explicit and direct, without hidden meanings.
In more indirect cultures, challenging someone directly may be considered rude or aggressive.

Examples of Indirect Communication

An individual from an indirect culture might compliment everything but a coworker's blouse to imply dislike for it.
The lecturer shares an anecdote about her mother indirectly suggesting she should get into the carpool lane by simply stating that it was open.

Cultural Values and Communication

Direct cultures value truth and efficiency, while indirect cultures prioritize respect and harmony.
Some cultures, particularly in Asia, may avoid direct disagreement to prevent dishonoring the other person. This might align with shame cultures, where avoiding embarrassment or loss of face is crucial.

Real-Life Examples

Aerospace engineer, Jeremy, was working with a colleague from a different country and he would present ideas, and Jeremy's team lead would often be like, "Great idea, Jeremy! Good job!". However, Jeremy's ideas would never actually take action. The team lead was merely trying to be polite, and the fact that the team lead didn't follow up was an indication that Jeremy's ideas were not being taken into consideration.
The Harvard Business Review (HBR) shares a story about a German buyer visiting a Chinese factory to inspect bicycles, he flies all the way over, he asks if can take two bikes off the rack. He said ride through the countryside together. At the end, may have heard a rattle or two.He avoids directly criticizing the bikes' quality out of concern for the company's reputation.

Implications for International HR

The lecturer emphasizes the awareness that cultural differences does not mean that everyone in that culture acts that way.
You can manage employees while they disagree, and help them learn how to engage with one another despite communication based differences
Understanding these differences is essential for managing employees, resolving conflicts, and facilitating negotiations.

Time Orientation: Linear-Active, Multi-Active, and Reactive Cultures

The lecture shifts to the study conducted by British linguist, Richard Lewis for his views on time.
The instructor does to the audience regarding what kind of time users that are. The three options are someone who shows up on time and is well prepared, sticks to the schedule. Another is somebody who may or may not be on time, based on how well or not they are enjoying what they are doing in the moment. The third showing up early to be courteous to the side they are working with, while at the same time emphasizing not being rushed.
Three main types of cultures exist: Linear-Active, Multi-Active and Reactive cultures.
Linear-Active Time (e.g., North Americans): See time as a scarce commodity to be used efficiently. Linear active values productively and efficiency and see time as money. They plan ahead and stick to schedules.
Multi-Active Time (e.g., Italians): Prioritize relationships and enjoyment, being flexible with schedules.
Reactive Time (Also known as Cyclical): Show respect and courtesy through punctuality, although relationship building and time enjoyment is also very important.
The lecture highlights how US culture understands time which is that we don't think about the past. The present is only for doing task. The schedule is very important.

Hypothetical Scenarios and Examples

In Linear-Active cultures, wasting time is avoided at all costs, focusing on immediate results.
Multi-Active. An Italian might ask, why are you so angry to the German who showed up at a later time? The German would say, because it is schedule in my diary. An Italian, in reality has little care to the time set for the schedule.
The lecturer also shares a story about her time when she was an educator. She knew that students did not own watches, and could come at many times with a large range of time from one another.
Spain views deadlines to be flexible for situations where there is a long standing relationship with the other party, and has a visual example
In Cylical cultures, cyclical, time is viewed the other way and are common in Asian cultures like Korea. They operate from a high lens and connect topics with ease. They go around the topic to emphasize respect and courtesy
The Western Approach for different items or products is generally more linear.
There were benefits to cyclical such as easy realization.
The instructor cites her colleague who worked in the US but was born in the US to empathize this point on this culture.
The lecture highlights different scenarios in which people can get used to the styles of time between cultures and that requires patience.
Many Americans are more frustrated with cyclical or multi-active cultures since they are used to linearity. Because many want directness and hate circling around. Many also do things for courtesy

Implications for International HR

Three, organizational strategy with the Senegal Mine example.
Understanding these different approaches to time is essential for avoiding misunderstandings and managing expectations in international business contexts.

Organizational Culture: Family, Eiffel Tower, Guided Missile, and Incubator Cultures

Case Study: CSPT Mine in Senegal

Organizational strategy.
The lecture introduces a case study of a mine run in Senegal, illustrating that certain management tactics do not work under particular conditions.
A mine was founded in 1957 to mine phosphate. In 1975 the Senegalese state had 50% interest in the company's shareholdings, and the first manager took over. The question is, what approach should the management have on the company?
Initial decision: French practices as if they had more cut in management or senegalese. Or do something with a blend. Because it shows diversity
Insight: The manager might need to adapt the styles so it matches because they have the employees inside the mine. If the french are gone it can be hard for the new employees to fully adopt.
Actually, this is more wise then the actual thing that happened next, which a decision from the actual management because it was a bad deal
After the French managers are gone, the new managers had actually wanted to keep the french styles going that were already on the mine. This declined productivity and did the opposite because it was not what the fellow employees had wanted.
The hierarchical system did not work, and the workers felt degrading. Some people say that the french managers are better, so everyone looks equal. But the employees said they don't mind submitting to them because it felt better than submitting when being managemented by colleagues in the same area that already gave tension.

Trompenaars' Four Culture Types

Fons Trompenaars and Charles Hampden-Turner broke down four cultures in the work: Family, Eiffel Tower, Guided Missile, and Incubator cultures.
When you're looking at HR the goal is to always have a plan in mind. * Family Culture: Hierarchical, person-oriented, paternalistic; focus on loyalty, relationships, and tradition; common in Asia. * Eiffel Tower Culture: Hierarchical, task-oriented, formal; focus on efficiency, rules, and expertise; common in Europe. * Guided Missile Culture: Egalitarian, task-oriented, dynamic; focus on innovation, collaboration, and results; common in North America. * Incubator Culture: Egalitarian, person-oriented, adaptable; focus on self-expression, creativity, and personal growth; common in Silicon Valley startups.
- The US values Incubator, however the UK is more towards Guided Missile structure.
Clear example of the roles is the family culture, such as in east Asia where leader is meant to protect employees. Like in Japan where employees are there from the rest of their lives because they are protected and taken care of. Has this term known as Indulgent dependency, which is what the US may see as more uncomfortable.
Emily and Paris, as a representation of this, displays how the work can be and demonstrates, however not like Emily's family since she has other priorities. Relationships there are also like this as well.