When human civilization was in the necessent stage, people were used to consume natural resources surrounding them. With demographic changes and development of human society, human need grown and to meet this growing need trade became a prominent mean. Initially, people used to do trading among groups and in unstructured ways. Later, with distinction among groups and geographical boundaries commercial procedures evolved to satisfy growing human need. The people associated with these, became business people and gradually their organization evolved as companies.
Previously these companies were confined among their own regional and national boundaries. But growing competition among themselves, they were forced to expand their businesses in other countries – they become international.
These international companies entered host countries, in many ways and most recently Joint Venture became very popular because of its many benefits. In Joint Venture, two or more companies with complementarily in operation and thinking come together to satisfy their business needs and in most of the cases international joint ventures faces a lot of human resource constraints because of different cultural and social backgrounds of their parents.
We are now in the service economy and day by day importance of people is becoming more prominent in managing business operation and these are particularly more critical in operating an international Joint Ventures. In an International Joint Venture the following picture is prominent:
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Human resource Management is about managing human relations in individual and group level and human relation in the interrelationship among people as they work together to achieve organizational goal and attain satisfaction in terms of achieving their objectives. It integrates knowledge from the disciplines of psychology, sociology, and anthropology. Psychology, the study of why people behave in certain ways, facilitates understanding of learning, thinking, and developmental processes.
Sociology is an inquiry into how people behave in-groups and focuses on the impact that groups have on their behavior. By examining symbols and articrafts, anthropology studies culture of the past and are concerned with discovering how past occurrences influence their behavior. Human relations’ draws on knowledge of the behavior science, unify this information, and apply it to the study of human interrelationships.
While assessing the Human Resource Management principles in international companies, cultural issues are considered with care, as they are the most crucial to the companies’ image and define its identity.
Culture is acquired the knowledge that people use to interpret experience and to generate social behavior. This knowledge forms values, creates attitudes and influences behavior. Culture has following characteristics:
Learned: Culture is not inherited or biologically based. It is acquired by learning and experience
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Shared: People as members of a group, organization, or society share culture: it is not specific to single individuals.
Transgenerational: Because culture is shared and passed along from generation to generation, it is cumulative, relatively stable and somewhat permanent. Old habits are hard to break, and people tend to maintain its own heritage in spite of continuously changing world
Symbolic: Culture is based on the human capacity to symbolize or to use one thing to represent another
Patterned: Culture has structure and is integrated. A change in one part will bring changes in another
Adaptive: Culture is based on the human capacity to change or adapt, as opposed to the more genetically driven adaptive process of animals. Culture is passed along from generation to generation, but one should not assume that culture is static and immune to change. Far from being the case, culture is constantly changing – it adapts itself to new sources of knowledge.
Importance of culture
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Today’s managers operate in a world, where culture changes than any other period in human history. To survive and develop managers need new skills to cope with these changes in their life styles.
Every manager should consider the constraints imposed by the cultural context, because it is impossible to coordinate the actions of people without a deep understanding of their values, belief and expressions.
There are many ways of examining cultural differences and their importance on management. Culture can affect managerial attitudes, managerial ideology, and even business government relations.
There are four major dimensions of culture:
Power distance: is the extent to which less powerful members of institutions or organization accept that power is distributed unequally. A greater power distance indicates an accepted hierarchy in organizational relationship, a smaller power distance relates to greater participation in decision-making, and greater equality in the organization.
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Uncertainty avoidance: is the extent to which people feel threatened by ambiguous situations, and have created belief and institution that try to avoid these. People with high uncertainty avoidance try to limit conflict and risk taking.
Individualism – Collectivism: This dimension relates to whether participants are concerned about their own needs, goals and achievements or whether the social group norms and benefit take precedence. Individualism is the tendency of people to look after themselves and their immediate families. The collectivism is the tendency of people to belong to groups or collectives and to look after each other in exchange for loyalty.
Masculinity – Femininity: there is basic dichotomy between the rational achievement orientation and the emotional affiliation orientation. Masculinity is defined as a situation in which the dominant factors in society are success and money. In contrary, femininity is the term used to describe a situation in which the dominant values in society are caring for others and the quality of life.
Human resource Management in International Joint Ventures
While assessing HUMAN RESOURCE MANAGEMENT principles of overseas companies, we could consider the company culture in three aspects:
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Bureaucratic culture, technical culture and managerial culture
Normally human resource management has the following dimensions – and each of them has to be considered on those three cultural aspects. The dimensions are: