The IBM Hofstede study is useful in understanding national cultures, but its usefulness in understanding how this relates to workplace values is rather limited. Hofstede’s culture theory does not acknowledge diversities in national practices and hence their institutions. Territorial differences exist within any given nation, such that individuals in one region or province may act differently from others. Consequently, it becomes very difficult to use Hofstede’s recommendations when such obvious sub cultural differences exist (McSweeney, 2002).
Sometimes cultural contradictions exist in one culture, so an individual may have to reconcile diverging expectations at any one time. In this regard, Hofstede did not consider the situational variables that may cause employees to abandon one worldview over another. For example, even though a business development manager comes from an individualist country, such as the US, when he attends a meeting as the only representative from his firm, he will act collectively for the sake of his organization. It becomes quite ineffective to generalize people’s behaviour on the basis of Hofstede’s five cultural dimensions without thinking about possible cultural contradictions and contexts.
Furthermore, this author does not consider the importance of change. The research he carried out in the 1980s may not be as relevant today as it was 30 years ago; a number of social, political and economic factors may have altered those cultures. Some countries have integrated into others, such as Hong Kong and China, while others like Yugoslavia have broken up into smaller states. Each of these nations no longer holds the same cultural inclinations that existed in the unified or separated states. One must therefore question Hofstede’s usefulness in understanding workplace values and attitudes. Since the theory does not account for the numerous influences, variations and changes that take place in human resources, then one must consider other perspectives on the matter.
Institutional perspectives are a better way of understanding workplace values because they illustrate how these factors relate to workplace variables and HRM policies (Rubery and Grimshaw, 2003). Institutions reflect the role of the state in the organization of capital such that countries can either be liberal or possess coordinated economies (Hyman, 2004). Additionally, business systems shape economic cooperation, control and competition within institutions (Whitley, 2002).
For instance in companies that are associated with Liberal Market Economies (LMEs), business owners tend to think of their employees as disposable and costly to the running of the institution. They will often emphasise the importance of leanness such that their human resource practices will be flexible (Giddens, 2006). For instance, employees will move within the organisation or in others. This means that only short term goals will be the main emphasis and they will reward their employees monetarily for strong performance (Sorge, 2004). Employees’ actions must alter in order to accommodate these expectations or attitudes. Training is seen as an overhead cost rather than a crucial part of the company’s strategy (Albert, 1993).
Conversely, Coordinated Market Economies (CMEs), such as Scandinavian countries and Germany, tend to focus on long term goals. They often view employees as assets, not expenses. This means that such institutions will train their employees and give employees assurances of job security. In response, employees from such nations tend to respond by participating in their organisations and remaining loyal to them (Edwards et al., 2005). Therefore, the institutional perspective is more reflective of differences in HRM because it illustrates how forms of capital control manifest in companies. This school of thought is better since it directly applies to the quality of relationships between managers and their employees and between employees themselves.
References
Albert, M 1993, Capitalism against capitalism, Whurr, London.
Edwards, T, Almond, P, Clark, I, Cooling, T & Ferner, A 2005, ‘Reverse diffusion in US multinationals: barriers from the American business system’, Management Studies Journal, vol. 42, pp. 6.
Giddens, A 2006, Sociology, Profile Books, Polity press, Cambridge.
Hyman, R 2004, Varieties of capitalism, national industrial relations systems and transitional challenges. Sage, London.
McSweeney, B 2002, ‘Hofstede’s model of national cultural differences and their consequences’, Human Relations, vol. 55 no. 89, pp 89-118.
Rubery J & Grimshaw, D 2003, The organisation of employment, Palgrave, London.
Sorge, A 2004, Cross national differences in HR and organisation, Sage, London.
Whitley, R 2002, Business systems, Thomson Learning, London.