Geert Hofstede™ Cultural Dimensions
The following is excepted from the paper "Human Resource Strategies as a Technology of Governance in Danish Subsidiaries in Southeast Asia" by Daniel Fleming & Henrik Søborg
As with any concept, idea, or research, there are always discussions, disagreements, and contrarian viewpoints. This portion of Fleming's and Søborg's paper present views that challenge portions of Hofstede's work.
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"As human resources are mainly developed in local organizations and cultural institutions, we begin by looking at the formation of local work cultures and the international debate about how multinational companies are influencing local work cultures. How resistant are different national working cultures to the cultural impact of multinational companies? Do HRM discourses in multinational companies encourage global convergence or local divergence?
- Convergence, transnational communication and a ‘third culture’
In the literature on international comparative management and organization, interest in the above questions has been growing over the last 20 years. Several case studies have focused on work culture, management and organizational development in multinational companies in different countries (Hofstede 1980; ILO 1991; Frenkel 1994; Garsten 1994). These studies reach different conclusions about how cultural, institutional and technological factors influence management and organization in companies in multinational groups within the same industry, and especially how management and organizational culture influence employees in local companies in a multinational group. Some claim that local cultural and institutional factors are crucial in shaping the development of management and organization and particularly employees’ attitudes towards working life (Hofstede 1980). Others claim that although local values are important for the development of employees’ attitudes towards work, the corporate culture in a multinational group becomes more and more important in local employees’ value orientations (Garsten 1994).
The different interpretations of the impact of multinational companies on management and organization in foreign subsidiaries have breathed new life into the convergence debate from the1950s and 1960s (Kerr, Dunlop, Harbison, Myers 1960). In contrast to the old convergence approach, which laid great emphasis on institutional systems and structural processes, the new approach focuses more on the actors and carriers of convergence processes (Thompson, Flecker,Wallace 1994/95; Locke, Kochan, Piore 1995). The new focus is on transnational processes in multinational companies and not so much on differences in National Business Systems (Whitley1990), industrial relations or societal effects (Maurice et al.1980), which were the dominant issues in international management and organization research in 1980s. The authors within the new convergence school do not argue against the influence of national social institutions on company strategies and organizational practices, but they raise the question of whether the increasing globalization of many companies does not reduce the influence of national institutions and cultural values. They pay greater attention to transnational actors’ potential capacity to reduce national differences in management and organization. They argue that the increasing internal and external competition in multinational companies searching for “best practices” is undermining the importance of national social institutions and local cultural values in company strategies and practices (Garsten 1994; Castells 1998).
We do not intend to discuss these positions at length here. Instead, we limit our discussion to two key positions that represent different interpretations of the impact of globalization on culture. Geert Hofstede’s analysis of IBM subsidiaries in more than 50 countries is an approach that has been inspiring to many researchers because it focuses on national culture and work-related value differences in a single organization. Yet, this approach has been criticized for giving biased emphasis of the influence of national culture on employee values. Hofstede has sought to test how employees in different national contexts look at the following four theoretical dimensions:
The outcome of his survey is that employees in the same national context share similar attitudes towards these four dimensions. Differences only arise between different national contexts. The result of Hofstede’s investigation is not surprising. IBM’s subsidiaries do not adapt to the parent company’s values and culture, but continue to reproduce local values. There is barely any scope for external influence.
Several authors have criticized Hofstede for not taking into account the changing relationship between parent companies and subsidiaries in a globalized economy. Among his critics is Christina Garsten who, in her analysis of Apple Computer, ends up with a different view of the parent company’s impact on its subsidiaries. Garsten does not seek to identify national homogeneity and consensus in Apple’s national subsidiaries by analyzing common national cultural values. The cultural complexity that Christina Garsten seeks to identify in Apple Computers demands a more dynamic concept of culture than Geert Hofstede’s categorization of attitudes according to pre-established theoretical dimensions. Christina Garsten sees culture as a dynamic process in which a collective constantly redefines itself to adapt to a shifting situation. Using this concept of culture, a national group of employees in a multinational company does not act in accordance with one common set of collective national values. The group’s actions are influenced by various sub cultural contexts and display different interpretations of and engagement with their company.
We find Garsten’s approach very inspiring, particularly the way in which she takes into consideration the influence of transnational communication streams in companies. Hofstede did not pay much attention to this, perhaps because global human resource strategies were much less developed in the 1970s when he carried out his research. Transnational communication between the parent company and the subsidiaries in Apple Computer is, according to Christina Garsten, a dialectical relationship in which both local and global processes are at work. Local employees are anchored in their local culture and environment. Yet they also work in an organization that is not local but global in its ideas and set-up. This global determination of the local subsidiary does not mean that the latter loses its own local culture or influence on local production. In the globalization process, there is a built-in dialectical tension between the global and local dimensions. In other words, the transmission of information and knowledge from headquarters to subsidiaries also involves a transformation where local actors filter and interpret what they receive. However, it is worth stressing that in this transmission process communication channels in multinational companies are asymmetric. It is the headquarters that have a pivotal role in opinion formation in the subsidiaries, mainly because of dominance over media, information and HRM in companies. However, this asymmetry does not necessarily imply a homogenization which hampers local creativity and autonomy in the subsidiaries.
How can human resource management discourse be understood in the dialectical relationship between the global and the local in multinational companies? As a result of the growing networks in multinational companies, human resource management discourse is increasingly shaping the thinking of management groups in the individual units and the way in which they implement demands and tasks. It is also a platform for establishing a common language among the units. Manuel Castells has tried to describe these complicated processes in The Rise of Network Society(Castells1996). He considers network structures and growing flexibility as two closely connected elements in the new global economic system. He argues that networking strategies add flexibility to the system, but they do not solve the problem of adaptability for the companies. In our opinion, this is a key reason why management in multinational companies seek strategies which can cope with flexibility. Manuel Castells makes an interesting observation in this connection. “To be able to internalize the benefits of network flexibility the corporation had to become a network itself and dynamize each element of its internal structure” (Castells 1998: 164). In such network structures, management has to experiment with horizontal organizational models and decentralization of the units. This is precisely the agenda of human resource management discourse.
When management experiments with these network structures in multinational companies, it engenders cultural encounters between units that have different cultural backgrounds. What is the outcome of these encounters? Mike Featherstone uses the apt concept of a “third culture” to understand the outcome of these encounters in the globalization process (Featherstone1990: 7: 1-14). The third culture argument is that national and local cultures and identities increasingly have to relate to global discourses, but they do not necessarily adopt them. To illuminate this argument, we will discuss two of the most powerful discourses in the present global debate: the free market and human rights. Universal principles of free open markets, private ownership and human rights increasingly affect material and ideological practices in most countries. However, when implemented as new principles or laws in a given national context (e.g. the ILO child labor convention), a third outcome is produced which is neither national/local nor global/universal. Rather, it is an encounter of two cultures which results in a third (at least until the law is integrated into national culture). To the extent that we can think of a global culture in daily life or in practice, not just as an ideal or a universal concept, third culture discourses may be the closest we can come to tentatively defining a global culture in practice. There are many different phenomena which suggest that globalization is a differentiated, multi-dimensional and polycentric process.3It is not just a question of one multinational agenda or one dominant superpower discourse.
The same logic can be used when analyzing management in subsidiaries which implement human resource strategies. Multinational companies with different parent company cultures set up human resource strategies inspired by global consultants and best practice examples. They transfer HRM strategies to subsidiaries, which develop a third company culture: a reflexive, discursive mix of the parent company culture, the local work culture and the multinational practices. In fact, all multinational subsidiaries represent different third culture outcomes, which together constitute a global company culture in practice.
Although most human resource development in multinational companies does not have a particularly high public profile compared with, for instance, human rights or democratization discourses, its impact should not be underestimated. Managers may also take part in public discussions on education, vocational training and qualifications, but company culture is generally concealed from public scrutiny and intervention. Still, companies may exert a powerful influence over industrial relations policies, salary systems, vocational training, and IT-strategies in many countries. By company culture, we understand not just the values prescribed by management but also tacit knowledge and collective experiences of work culture and management-labor relations. Here, we believe that human resource management has an increasing impact on the formation of company cultures and employee identities. However, because this process does not take place in public and is therefore not subject to critical reflection, human resource management tends to be seen as a neutral or objective training and qualification process, not as a technology of governance for complex decisions and power relations in companies."
The full paper can be found >>> HERE
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