Culture and Management:
What effect does national culture
have on staffing in subsidiaries
and headquarters?
Bhavna Gulati
Project Supervisor: Frances Jørgensen
A M.Sc. International Business Thesis, Management Department
June, 2009, Aarhus School of Business
Acknowledgement
This dissertation could not have been written without Ms. Jørgensen who not only
served as my supervisor but also encouraged and challenged me throughout the
dissertation process. She guided me never accepting less than my best efforts. I would
also like to take this opportunity to thank my mother who has been like the rock of
Gibraltar, comforting and soothing me all the way. Without the care and
understanding of my family and blessings of Almighty I would not have been able to
reach where I am today. This is also for my dearest papa who always wanted me to
excel in everything I did, who I know can see me and will continue to bless me from
his abode in heaven.
S. No.
Topic
Page No.
1.
Introduction
2.
Theoretical background
1
2.1
Culture and National Culture
4
2.2
Understanding National Cultures
8
2.3
National Culture and Staffing – the connection
16
2.4
Staffing
16
2.5
Theoretical Model Explaining Staffing in Different Cultural
22
Contexts
3.
Central Research Question
24
4.
Research Methods - Quantitative Vs Qualitative
24
4.1
Reliability, Validity, Generalization
28
4.2
Samples
29
5.
Collecting the Data
5.1
Locating the Companies
29
5.2
Contacting the Companies
30
5.3
Conducting Interviews
31
6.
Findings
6.1
Table
35
6.2
Description
36
7.
Discussion
39
8.
Conclusion
42
9.
References
44
10.
Appendix
Introduction
People often say that the world is getting rapidly smaller. Be it the time taken to travel
across the globe, or to communicate with someone at the other end of the world,
things have changed considerably. The world we knew is shrinking fast. In the
backdrop of powerful trade and business interests, political boundaries are tumbling,
geographical obstacles are being levelled down and cultural barriers are being won.
Economic integration among regional blocks is emerging one after another and
political boundaries are transcended by collaborations and cooperation among nations,
governments and business houses.
There is a fundamental transformation of business underway. Forged by digitization,
ubiquitous connectivity, and globalisation, this transformation has radically altered
the very nature of the firm and how it conducts its day to day business. No industry is
immune to this trend. Coming to terms with the implications of this change is critical
for survival and growth. Yes, globalisation is the new buzzword used to describe the
establishment and maintenance of various cross border economic, political and sociocultural relations happening in the world today. With the world beginning to work as a
unit and the boundaries disappearing, we seem to be en route to what Marshall
McLuhan (1968) has called the global village.
Synchronous to the changes in the global economy, there is reciprocation by the
managements of various companies around the world which are no longer national
firms, but have subsidiaries in many countries becoming Multi-national Enterprises.
This implies that firms from any country now compete with firms operating not only
from their domestic market but also the international market. The companies are
becoming less tied to specific locations and their operations and allies are spread
around the world, as they source resources and coordinate activities all around the
world. For these multinational enterprises, the world seems a playground with their
processes spread all across the globe.
This expansion of the global economy with ever-increasing sense of chaos and
unpredictability requires that the management develop knowledge, skills and
experience in the international arena to be able to succeed in the dynamic and ever
changing business environment. In response to this widening business tapestry, is the
emergence of a new globalised professional, who is well-educated, trained executive
in the business field, holding important managerial positions in the multinational
enterprises. These executives travel internationally, think in cosmopolitan than in
national terms and speak the globalised business language – English. These citizens of
the world are seen as a force for pursuing the business agenda of further globalization.
It is on the shoulders of these management executives that the responsibility of
successful international management lies.
However, in this convergence of the world brought about by gloablisation, there is
also a divergent streak, which brings out various differences among the nations.
Though the world is claimed to be becoming culturally homogeneous, still very
significant differences exist between different national cultures. The globalisation of
economy has made the differences among nations more resonant than ever since now
the uniqueness of a nation presents a challenge to the other nations of the world,
making it a little hard to deal with it. There are certain factors in the national
environment that distinguish a nation from another especially when it comes to doing
business.
These dissimilarities in the nations arise out of the distinctness in their political,
social, economic, cultural and administrative environments. It is in accordance with
the national environment that the firms, both national and multinational conduct their
business. It is imperative for the multinational enterprise to get to grips with the
substantial differences that exist between national cultures to develop an effective
understanding of different norms, values and assumptions, which are prerequisites for
successfully doing business in different nations. So, to be effectual, a thorough study
of the national environment must be made by a multinational enterprise before
establishing a subsidiary in a particular nation.
Among the different aspects of national environment, culture has a strong bearing on
business. Culture influences people’s behaviour in critical ways. This is so because
culture plays a fundamental role in forming values, which interact with the needs,
attitudes and norms of the individuals and groups and result in different behaviours.
This connotes that a thorough understanding of culture is very important for
international managers, especially where cultural differences exist between the host
country and the home country of the multinational enterprise. An understanding of the
cultural differences enables not only effective management by ensuring that people
behave in ways appropriate for the organisation but also correctly interpret the
behavioural differences and thereby interact effectively to avoid misunderstanding
and be accepted by others.
The success of the subsidiary operations significantly depends on how the opposing
forces of conforming to norms of the host country environment are balanced with the
norms followed in the home country or the best practices learnt in other foreign
subsidiaries. The complex role of managing international operations demands a
contingency approach to the dynamic environment of the subsidiaries, each of which
has its own unique requirements. Within the larger context of global trends and
competition, the rules of the game for global manager are set by each country.
While the global nature of business may call for increased consistency, the variety of
cultural environments call for differentiation. To survive locally, the management
needs to adapt to specific cultural requirements of different societies.
Setting up and operating a subsidiary in a foreign country requires high degree of
interaction with the local environment as the subsidiary derives its resources from the
local settings and surroundings. Apart from all the material resources, the human
resource or the employees play a key role in the success or failure of the subsidiary as
they are the ones who turn the plans into actions by the use of the physical resources
like machinery, technology, finance etc. Being mandated by local regulations and
legislations, the Human Resource practices are shaped by local conventions. Also, in
most instances the employees are hired from the competitive local labour markets,
hence conforming to local norms aids effective subsidiary operations.
The national culture with its values, beliefs and attitudes lays down norms for
acceptable social behaviour. It indirectly dictates the behaviour of people, their
preferences and perceptions. As a result, with the sourcing of the employees from the
local pool of talent creep in the characteristics of the national culture. Hence, a study
of national culture plays an important role in subsidiary establishment and operation.
Keeping this in mind, the present study attempts to understand the effect of national
culture on the staffing patterns of subsidiaries. Owing to the differences in national
cultures, the staffing practices followed in the home country and host country may
differ greatly. To analyse this, first we try to understand what culture is, what is meant
by culture of a country, what is staffing and how staffing may differ in different
cultural contexts.
Culture and National Culture
To be able to understand national culture and the extent of its influence, it is important
to first understand culture in its most basic form.
The construct of culture has caused a lot of confusion. Although there are multiple
definitions, they tend to be vague and overly general (Adekola and Sergi, 2007). Even
the various disciplines interested in the study of culture add to confusion. Though
looking at the puzzle of culture from different perspectives enriches the information
we have on it, but this does not necessarily increase clarity. The various paradigms
and research methodologies make it increasing difficult to arrive at a common
definition of culture (Schneider and Barsoux, 1997). In a business environment where
everything is based on precise calculations and expressions in numbers, culture is seen
as a too vague, too soft and a hard concept to grasp.
Scholars have produced many definitions of “culture”. In the words of world
renowned Professor Emeritus – Hofstede (1984), “Culture is the collective
programming of the mind which distinguishes the members of one human group from
another…Culture in this sense, includes a system of values; and values are the
building blocks of culture.”
This implies that:

A culture is particular to a group and not others

Culture includes a system of values, which are basis of culture
Anthropologists Levi-Strauss (1971) and Geertz (1973) define culture as “systems of
shared meaning or understanding (“web of signification”) which drive or explain the
behaviour observed. This connotes that:

Culture is shared by a group of people who understand it in the same way

The understanding shared by the group explains the behaviour exhibited by
them.
However, according to management scholar Schein (1985) culture is “a set of basic
assumptions – shared solutions to universal problems of external adaptations (how to
survive) and internal integration (how to stay together) – which have evolved over
time and are handed down from one generation to the next”. This means that:

Culture with its set of assumptions provides answers to universal problems,
which not only guide how to survive in the world but also direct how to stay as
a group.

These assumptions have developed over years (by virtue of experience)

The guidelines are handed from one generation to another.
From these varied definitions of culture, a few common characteristics can be derived.
These characteristics will present a clearer picture of culture which will enable a
better understanding of the concept. They are:

Culture is shared by a group of people. It is particular to and characteristic of a
group of people. It is a collective phenomenon which involves shared values
and meanings.

Culture has systems or values which are assumptions about how the members
of a cultural group must behave and understand the world around them.

Culture is relative i.e. different cultures perceive the world differently and
have different ways of doing things.

Culture is passed from one generation to another. It is derived from one’s
social environment and not from one’s genetic make-up.
Hence culture provides the members of a group with a sense of who they are, of
belonging and of how they should behave. It also provides them with the capacity to
adapt to circumstances by defining the appropriate behaviour in a particular
circumstance and to transmit this knowledge to succeeding generations.
Another approach to understanding culture is in the form of layers. The figure below
presents culture as a series of concentric circles with multiple layers. The model of
Schein (1985), Harris and Moran (1999), Trompenaars (1995) enables a better
understanding of the cultural puzzle by representing it on three levels:

Surface, explicit culture: behaviours and artefacts – this is the symbolic and
observable level of culture which includes things that are readily visible like
dress, food, architecture, etiquettes, body language, gestures etc.

Hidden culture: beliefs, norms and values – this second layer reflects the
norms, values and beliefs of the group. It is here that the views of good and
bad, right and wrong are determined. The standards shared by a group too are
defined at this level.

Invisible culture: underlying assumptions – this layer represents the core of the
culture presenting its universal truths. This level reflects the assumptions about
their existence by prescribing ways of perceiving. These underlying
assumptions are the basis of the values which guide behaviour at the explicit
level.
The layers of the culture model provides a way to understand culture as a series of
layers, with each layer, moving from outside to inside, representing less and less
visible values and assumptions but correspondingly more and more important values
and beliefs for determining attitudes and behaviours. These levels are arranged
according to their visibility such that behaviour and artefacts are the easiest to
observe, while the underlying assumptions need to be inferred. To understand what
the behaviours or beliefs actually mean, the underlying assumptions have to be
brought to the surface. This is most difficult since assumptions are taken for granted.
The terms culture and national culture are quite often used interchangeably. The term
culture as seen above is more general than the term national culture. Whereas culture
explains the behaviour of a group, national culture specifically explains the behaviour
of people belonging to a nation/ country. Hence, from the above definition of culture,
national culture can be understood as a set of beliefs, assumptions and norms that
guide the behaviour of the people belonging to a country and it is this behaviour that
marks them as different from some other people belonging to a different country and
culture. Several studies (Hofstede, 2001; Hall, 1990; Harris and Moran, 1996;
Rosseau, 1990) also tend to use the term culture and nationality interchangeably, thus
implying that nation states comprise of populations with a shared history and
experience.
Understanding National Cultures
It is observable that people from different cultures act differently in similar life
situations. People may have different problems and they may think differently about
the same problems. This makes it imperative to compare cultures; not to explain the
phenomenon of culture, but to examine how culture influences individual action and
thinking.
There are two long standing approaches to understanding the role of culture:
a) the inside perspective describing a particular culture in its own terms and;
b) the outside perspective which attempts to describe differences across cultures.
Throughout the history of the study of cultures, there has been a dispute among those
stressing the unique aspects of a culture and those stressing the comparable aspects.
The first group of researchers claim that it is impossible to compare something as
different as for example apples and oranges because of their unique attributes.
Whereas, the second group of researchers argue that apples and oranges are both fruits
and so have something in common.
To distinguish between the unique and the comparable, the specific and the general,
cross-cultural psychologists have adopted the words: emic and etic. The emic
approach believes that cultures are different and issues related to one culture should
be understood through the particular cultural context. On the other hand, the etic
approach advocates constructing measures that are culture free and can be used in
cross-cultural studies without posing equivalence or comparability problems. In this
case, constructs and measures developed in one country can be used without any or
minimum adjustment to cultural differences.
Many of the cross cultural studies make use of the etic approach to study analyse and
generalise across cultures. Some of the most famous etic cross cultural studies include
those undertaken by Hofstede, Trompenaars. However the famous GLOBE study
makes use of both the etic and emic approaches to study cultures as those collecting
the data about the culture belong to the culture (emic) and generalise the data so that it
can be compared to such data about other countries (etic).
Increasingly researchers are assessing whether or not the wide variety of cultures
around the world can be reduced to a more limited set of cultural clusters with similar
characteristics. The studies conducted by Hofstede (1984, 1999, 2000),
Trompenaars (1993), House et al (1999) are a step in that direction.
The research of Geert Hofstede
One of the most important studies which attempted to establish impact of cultural
differences on management was conducted by Geert Hofstede. This study, now
considered a classic is based on employee opinion survey about their preferences in
terms of management style and work environment. It is the best known and the first
major study of cultural values in a large sample of countries in the subsidiaries of the
major multinational – IBM in fifty three countries spanning about 116,000 employees.
In particular this study focused on identifying country differences and regional
similarities on the basis of a series of work-related factors. Hofstede’s research
furthers how national culture affects the values of the workplace. The following
provides a short summary of the factors identified in his research:

Power Distance (high/ low): the distance between individuals at different
levels of a hierarchy.
According to Hofstede, organisations in countries with high power distance
would tend to have more levels of hierarchy (vertical differentiation), a higher
proportion of supervisory personnel (narrow span of control) and more
centralised decision-making. Status and Power would serve as motivators and
leaders would be revered or obeyed as authorities.

Uncertainty Avoidance (more or less): the tolerance for ambiguity.
In countries with high uncertainty avoidance, organisations would tend to have
more formalisation evident in greater amount of written rules and procedures.
Also, there would be greater specialisation evident in the importance attached
to technical competence in the role of staff and in defining job and functions.
Managers would avoid taking risks and would be motivated by stability and
security. There would be a strong emphasis on planning, organising,
coordinating and controlling.

Individualism Vs Collectivism: the relation between the individual and his
fellows.
In countries with a high collectivist orientation, there would be a preference
for group as opposed to individual decision making. Consensus and
cooperation would be more valued than individual initiative and effort.
Motivation is derived from a sense of belonging and rewards are based on
being part of a group (tenure and loyalty). The emphasis in such cultures is on
furthering team effort and integration.

Masculinity Vs Femininity: the division of roles and values in the society.
In countries ranking high on masculinity, the management style is likely to be
more concerned with task accomplishment than nurturing social relationships
(femininity). Motivation is based on acquisition of money and things than
quality of life (femininity). In masculine cultures emphasis is on profits,
meeting challenges and targets. However, in feminine cultures the emphasis is
on well- being and social responsibility.

Long Vs Short term orientation: temporal orientation towards life.
This dimension was developed in 1987 and is also known as Confucianism as
at both poles, the values seem to be taken straight from the teachings of
Confucius. Cultures with long-term orientation demonstrate the values of
persistence; ordering relationships by status and observing this order; thrift
and having sense of shame. Cultures with short-term orientation demonstrate
values of personal values of personal steadiness and stability; protecting one’s
face respect for tradition; reciprocation of greetings, favours and gifts.
Hofstede found not only that certain countries consistently show similarities based on
the presence of these characteristics but also that there were also major differences
between the various groups the countries were placed into.
The research of Fons Trompenaars
Fons Trompenaars (1995) undertook a similar large-scale study of over 15,000
employees in over fifty countries. Even though Trompenaars focussed on different
aspects of culture – such as how different cultures accord status to the members of
their culture, the varying attitudes toward time and nature and differing attitudes
towards individuals and groups and resulting relationships between members of
society, his overall conclusions are quite similar to those of Hofstede.
According to Trompenaars, every culture distinguishes itself from others by the
specific solutions it chooses to certain problems. These problems are classified under
three heads: those which arise from our relationship with other people; those which
come from the attitude to time and those which relate to the environment. Based on
the solutions different cultures have chosen to these universal problems, Trompenaars
identifies seven fundamental dimensions of culture. First five out of the seven come
from the first category. The seven dimensions are mentioned below:

Universalism Vs Particularism: emphasis on rules or emphasis on
relationships
In Universalist cultures whatever is good and right can be clearly defined and
always applies. However, in Particularist cultures greater attention is given to
obligations of relationships, unique circumstances and less attention is given to
abstract societal codes and norms.

Collectivism Vs Individualism: personal interest of an individual or the
interests of the group
This value dimension tries to understand how people relate to others. Is it that
people regard themselves primarily as individuals or primarily as part of a
group? Do they relate to others by discovering what they individually want
and then try to negotiate differences or is it that they place the shared concept
of public and collective good ahead of their individual wants.

Neutral Vs Emotional: the extent to which displaying of emotions is
accepted/ regarded as right
In neutral cultures reason dominates emotions and there is controlling of
feelings. However, in the affective/ emotional cultures the emotions dominate
the reason and people attempt to find immediate outlets of their feelings.

Diffuse Vs Specific: extent of involvement with other people
Closely related to how we express our emotions, this dimension deals with
whether people in a culture engage with others in specific areas of life and
single levels of personality or diffusely in multiple areas of life at several
levels of personality. In simpler words, is the access to life spaces guarded,
hard to enter, requiring permission for admittance with small public space
(diffuse) or is the public space more than the private space, segregated into
sections with easier admittance (specific). In specific cultures anyone entering
either of the spaces (public or private) is not necessarily close or life time
buddy but in diffuse cultures when people admit someone, they let them nearly
to all their private place.

Achievement Vs Ascription: according of status to other people
While some societies accord status to people on the basis of their achievement
(achievement), others ascribe it to them by virtue of their age, class gender etc.
(ascription). In cultures bent towards achievement, people are judged on what
they have accomplished. While in the cultures bent towards ascription, status
is conferred on the basis of a person’s being.

Attitude towards time: achievements of past Vs plans for future
In some societies the past achievements create a greater impression as
compared to those of the present. However in other societies, the achievements
of the past are not as important as the plans of the future.

Attitude towards environment:
Some cultures see the major focus affecting their lives and the origins of vice
and virtue as residing within the person. Hence, they derive motivations and
values from within. While other cultures see the nature and world as more
powerful than the individual. They see nature as having its own course and as
something to be feared or emulated.
GLOBE Study
GLOBE is an acronym for Global Leadership and Organisational Behaviour
Effectiveness Research Program. GLOBE is a worldwide, multiphase, multi-method
project which was undertaken with the objective to explore the fascinating and
complex effects of culture on leadership, organisational effectiveness, economic
competitiveness of societies and the human condition of members of the societies
studied.
House et al. (2004) report the results of a ten-year research program based on the
responses of about 17,000 managers from 951 organisations functioning in 62
societies over the world. The study measured culture at different levels with both
practices and values (what is done Vs what ought to be done) and proceeded to study
how culture relates to societal, organisational and leadership effectiveness. This was
done by first differentiating between the attributes of societal and organisational
cultures. The analyses led to identification of nine major attributes of culture, which
when quantified are referred to as cultural dimensions. Following are the definitions
of the core GLOBE cultural dimensions:

Uncertainty Avoidance: it is the extent to which members of the society or
organisation strive to avoid uncertainty by relying on established social norms,
rituals and bureaucratic practices.

Power Distance: it is the degree to which members of a society or
organisation expect and agree that power should be stratified and concentrated
at higher levels of government or organisation.

Institutional Collectivism: it is the degree to which societal or organisational
practices encourage and reward collective distribution of resources and
collective action.

In-group collectivism: it is the degree to which individuals express pride,
loyalty and cohesiveness in their organisations or families.

Gender Egalitarianism: it is the degree to which a society or organisation
minimises gender role differences while promoting gender equality.

Assertiveness: it is the degree to which individuals in societies or organisations
are assertive, confrontational and aggressive in social relationships.

Future Orientation: it is the degree to which individuals in societies or
organisation engage in future oriented behaviours such as planning, investing
in future and delaying individual and collective gratification.

Performance Orientation: it is the degree to which society or organisation
encourages and rewards group members for performance improvement and
excellence.

Humane Orientation: it is the degree to which individuals in societies or
organisation encourage and reward individuals for being fair, altruistic,
friendly, generous, caring and kind to others.
These cultural dimensions have their origins in the dimension identified by
Hofstede (1980), Kluckhohn and Strodtbeck (1961), McClelland (1961) and
Putnam (1993). It was found that there is wide variation in the various practices
relevant to the nine core dimensions.
Since the potential number of different national and ethnic cultures is so great, the
efforts by Hofstede, Trompenaars and studies like GLOBE to cluster countries with
similar cultural profiles identifying a limited set of variable with which cultural
differences can be understood have been welcomed. Though they simplify the
complexity of understanding national cultures, however isolating country variances
and minimising variables provide little understanding about the sub-cultures that may
exist within a country. Also, over reliance and emphasis on such approach could pose
a danger of oversimplification by overlooking other important aspects of cultures that
make it the way it is.
National Culture and Staffing – the connection
Responding to the competition, organisations are setting up offices in different
countries across the globe. Operating in several countries, the organisations regardless
of their size, location or scope of activity are influenced by the varying cultures in the
different countries. Cultures with their system of values explain the attitudes,
behaviour of people and the choices people make. So, deriving their resources
especially human from the host country makes the host country culture a significant
factor in the subsidiary operations.
Setting up offices and finding the right people to manage the operations and functions
could be an important challenge especially in the new host country environment.
Being new and unfamiliar with the available human resources, nature of local labour
market, labour laws etc. the task of finding candidates competent enough to perform
well on their job while contributing to the global competitiveness of the multinational
organisation could prove to be a herculean task. This problem could be compounded
by the fact that different cultures with their underlying assumptions stress on different
values and behaviours that get reflected in the way organisations are managed and
controlled. To understand how staffing can be influenced by culture, the following
section provides a description of staffing followed by a theoretical model that helps
understand staffing in different cultural contexts
Staffing
According to Heneman and Judge (2005), staffing is the process of acquiring,
deploying, and retaining a workforce of sufficient quantity and quality to create
positive impacts on the organization’s effectiveness. This definition brings to light the
following points about staffing:

It is a process or system

It involves quantity and quality issues

The process must have a positive impact thus on the effectiveness of the
organisation.
Staffing or resourcing the organisation is seen as essentially involving assessing,
appraising, grading, tracking, sorting, sifting and placing employees. The staffing
objectives are concerned with ensuring than an organisation is able to call on the
services of sufficient number of staff to meet its objectives. This implies that staffing
is a process involving steps by which the organisation finds the required quantity and
quality of people.
However, Mathis and Jackson (1999) state that staffing includes attracting and
choosing potential jobholders. They further go on to define the part of attracting the
candidates/ potential jobholders as recruitment and the part of choosing from those
candidates as selection. Thus, the recruitment and selection process is concerned with
identifying attracting and choosing suitable people to meet an organisation’s human
resource requirements.
Both recruitment and selection are integrated such that where recruitment stops and
selection begins is debatable; nevertheless scholars have provided several definitions
of recruitment and selection. Whitehill (1991) describes the recruitment process as a
positive one, ‘building a roster of potentially qualified applicants’, as opposed to the
‘negative’ process of selection which ‘rejects from this list the non suitable
candidates.’ Another useful definition of recruitment is ‘searching for and obtaining
potential job candidates in sufficient numbers and quality so that the organisation can
select the most appropriate people to fill its job needs’ (Dowling and Schuler, 1990);
whereas selection is concerned more with ‘predicting which candidates will make the
most appropriate contribution to the organisation both now and in future’ (Hackett,
1991)
According to Foot and Hook (2005), the processes of recruitment and selection are
closely linked. Both activities are directed towards obtaining suitably qualified
employees and recruitment activities lay the groundwork for the selection process by
providing a pool of applications from which selections are made. However, though
the two activities are closely connected, each requires separate range of skills owing
to the different steps and stages involved and in practice may be fulfilled by different
staff members. Hence it seems more appropriate to study them separately.
Staffing Process
The need for staffing arises when there is a vacancy in the organisation. The vacancy
may be a new post that has been identified as a result of the strategic plan i.e may be
the corporate strategy involves expanding operations and so people are required to
work in the new operations or the vacancy may have arisen because an employee has
resigned, retired or dismissed.
The key stages of a systematic staffing approach can be summarised as: defining the
vacancy, attracting the applicants, assessing candidates and making the final decision.
In the words of Beardwell et al. (2004) the staffing process can be expressed in the
form of a series of questions:

Who do we want?

How can we attract them?

How can we identify them?

How do we decide whom to choose?
A short description of each stage is provided below.
Who do we want?
To be able to decide who do we need to fill a job position, it is required that we know
what the duties and responsibilities of the job are. A short description of the post, its
purpose and location in the organisation provides an understanding of what the
jobholder’s activities are and what they are meant to achieve. This statement
providing the summary of a job is known as Job Description. The next step involves
drawing up a person specification based on the job description, which identifies the
personal characteristics required to perform the job adequately. This document
outlines the knowledge, skills and qualities a person would need to have in order to be
able to do the tasks mentioned in the job description. The person specification is a
vital part of the recruitment and selection process as it provides the groundwork for
the next stages.
How do we attract them?
Once it has been determined that there is a vacancy to be filled and the job description
and person specification are drawn out, the next step involves deciding the best way to
let people know about it. At this point, a decision has to be made whether to fill the
vacancy through internal or external labour markets, also known as the internal and
external sources of recruitment. In many cases a mix of both the labour markets may
be preferred by the organisation to maximise the advantages and minimise the
disadvantages of the individual approaches.
Some organisations prefer to fill vacancies from within the organisation making use
of the existing employees, also known as the internal labour market. This is done by
way of providing the employees with opportunities for promotions and transfers.
Also known as the ‘soft’ approach (Beardwell et al, 2004), this approach increases the
morale, loyalty and commitment of the existing employees towards the organisation.
Alternatively, organisations could pursue a ‘hard’ approach (Beardwell et al, 2004) to
recruitment by searching for new employees in the external labour markets. By doing
so, new skills, ideas and experiences are added in the organisation helping it to deal
better with the rapidly changing environment that it operates in. Searching for new
employees in the external labour market can be done by advertising the job in
newspapers, journals, taking external assistance, making use of the employee
networks and referrals, participating in career fairs, and approaching university
campuses etc. The use of internet too has been an increasing source of external
recruitment. Over the years, both recruiters and job hunters have been increasingly
using corporate and external websites to advertise the job vacancies and accept CVs.
How can we identify them?
The stages described above constitute recruitment and are primarily concerned with
generating a sufficient pool of applicants. This stage onwards we deal with selection
where we concentrate on assessing the suitability of the candidates so attracted.
To be able to choose the best candidate for the position, it is required that the mass of
applications be reduced to a manageable number, a process known as short listing
(Foot and Hook, 2005). So the initial step in selection is categorising candidates as
probable, possible or unsuitable (Beardwell et. al, 2004). This is done by comparing
the information provided on the application form with the pre determined selection
criteria. Short listing is also seen as a matching process where the gaps between
candidates’ job related knowledge, skills and abilities and the requirements of the job
are common factors that lead to rejection of the applicant.
A preliminary evaluation of most of the skills of the applicant can be made at the
short listing stage, but it is not possible to judge an applicant’s personal qualities for
instance based on the information contained in the application form. Hence, the next
stage involves an assessment of these elements through various selection techniques
like interviewing, psychological testing (ability, personality, intelligence tests etc.),
work samples, assessment centres, references etc.
Interviewing is universally popular as a selection tool. Torrington et al (2002)
describe an interview as ‘a controlled conversation with a purpose’. Interview is a
face to face interaction designed to assess job-related knowledge, skills and abilities
and clarify information from other sources like tests, references etc. Interview is
usually the last step in selection process and it integrates all the information from
application forms, tests and reference checks so that a valid selection decision can be
made. However, over the years research has been unable to show that interviews have
predictive validity (Murphy and Davidshofer 2001; Smith and Robertson 1993) and
are seen as being overly subjective, prone to interviewer bias and therefore unreliable
predictors of future performance. But, whether interview is a valid selection tool
depends on whether the interview results are related to the individual’s job
performance that follows the selection decision.
The use of psychological testing, work samples and other techniques are seen as
providing information supplementary to the information gained about a candidate
during the interview besides countering an interviewer’s bias. The focus of these tests
is on specific job-related aptitudes and skills. The choice of the selection methods for
every job position/ vacancy is different as different techniques provide different kind
of information about the candidate which may or may not be related to the
requirements of the job vacancy.
How do we decide whom to choose?
After all information: subjective and objective has been gathered about the candidate
through interviews, tests, references etc, the next step involves making use of this
information to take a decision about whom to choose for the available job position.
The aim of the staffing process is to provide enough information to enable recruiters
to differentiate between those who can do the job and those who can’t. The final
decision involves measuring each candidate against the selection criteria defined in
the person specification as this will enable in deciding whether the person will be able
to perform the job or not.
The combined use of different selection methods enhances the quality and quantity of
information about each candidate, allowing the recruiters to make a more valid choice
from among the available candidates. However, since a variety of selection techniques
are used, it must be decided in advance what and how much each method should
contribute to the overall assessment. Some things will carry more weight than others
on account of being the essential prerequisites, while the lack of others may be
counter balanced by the presence of something else.
Usually this recruitment and selection process is standard among organisations but
sometimes it might get affected by the contemporary situation, factors like culture in
the external environment of the organisation, employers’ desire for flexibility etc. The
next section provides a framework that links the various stages of recruitment and
selection to the national culture, providing an explanation on how staffing could differ
in different cultures.
Theoretical Model Explaining Staffing in Different Cultural Contexts
Cross-cultural Human Resource management (HRM) is a newly evolving field that
may be considered under the broader area of international HRM. The primary
objective of the field is to examine the role of cultural context in design and
implementation of HRM practices. More specifically, cross-cultural HRM is
interested in the ways in which and the extent to which culture impacts on HRM
vis-a-vis other contingencies external and internal to the organization.
Aycan (2005) provides a systematic analysis of how culture affects HRM practices in
six key areas: Recruitment and Selection; Performance Appraisal; Training and
Development; Job Analysis; Human Resource Planning and Career management; and
Compensation and Reward management. By identifying the underlying cultural forces
leading to the differences in HRM practices in different countries, a framework is
provided which can be applied generally to any country or organisational context.
However, only the part of the framework relating to recruitment and selection is
described here as it is just this part that is the purview of the present study.
As an attempt to explicate the role of culture in HRM practices, a theoretical model,
the Model of Culture Fit (MCF) was proposed by Kanungo and his associates
(Kanungo and Jaeger, 1990; Mendonca and Kanungo. 1994; Aycan et al, 1999). The
model was tested in ten countries, Canada, the US, Germany, Israel, Romania, China,
Pakistan, India, Turkey and Russia, with the participation of 2,003 managers and
employees (Aycan et al., 2000). The MCF assessed culture at two levels: societal (i.e.
the socio cultural context) and organizational (i.e. internal work culture).
The framework provides the working definition of socio-cultural context as including
values, belief systems, assumptions and behavioural patterns that differentiate one
group of people from another. Culture is conceptualized and measured through
various value dimensions (e.g. Hofstede, 1980; House et al., 1999; Trompenaars.
1993; Schwartz and Bilsky, 1990). According to Aycan (2005) using value
dimensions in operationalizing culture is not without criticisms, but this approach is
common and convenient, because cultural dimensions show validity; they are at the
right level between generality and detail; they establish a link among individual,
organizational and societal level phenomena; and they are easy to communicate.
The theoretical model puts forth four cultural contingencies that generalise how
recruitment and selection takes place in cultures with different cultural dimensions.
The propositions provided are as follows:
Proposition 1: Recruitment and selection are based on "hard criteria"(i.e. job related
knowledge, competencies, technical and cognitive skills) in cultures
that are high on Performance Orientation or Universalism. 'Soft
criteria"(e.g. social and interpersonal skills, social class, age) are used
in cultures that are high on Femininity, low on Performance
Orientation.
Proposition 2: Internal recruitment is preferred to external recruitment in cultures that
are high on Uncertainty Avoidance or Collectivism.
Proposition 3: Recruitment channels and methods are informal and network-based in
cultures that arc high on Uncertainty Avoidance, Oriented towards
Ascribed status or Collectivistic. Recruitment channels and methods
are formal, structured and widespread in cultures that are high on
Universalism or Performance Orientation.
Proposition 4: Selection methods are standardized and job specific in cultures that
are high on Performance Orientation or Universalism. Whereas they
are not standardized, broad-ranged and rely on face-to-face
interactions in cultures that are high on Particularism or Femininity.
Through these propositions, the framework explains how staffing could differ in
different cultures. An analysis of the different dimensions of the culture in which an
organisation operates provides an indication of the preferences people may have for
different channels of recruitment, methods employed for staffing, standard candidate
profile etc. Hence by understanding culture and its underlying assumptions values and
beliefs it is possible to understand who to hire, how to hire and from where.
Central Research Question
Basis for the research question has already been laid down in the previous section.
Hence, the central research question has been formulated thus:
What effect does culture, manifested in the form of cultural dimensions have on the
staffing pattern followed in the Indian subsidiaries of Danish companies as compared
to the staffing pattern followed at the headquarter in Denmark?
To answer this question it was required that a research be undertaken. However it
remains to be seen which research method would prove to be most appropriate. To be
able to ascertain the research method and techniques that would best answer the
research problem, first an understanding of what the available research methods and
techniques are is imperative. The following section attempts the same.
Research methods – Qualitative Vs Quantitative
Research methods refer to systematic, focused and orderly collection of data for the
purpose of obtaining information from them to solve/ answer a particular research
problem or question (Ghauri and Gronhaug, 2007). Research methods can be
classified in various ways; however one of the most common distinctions is on the
basis of the methods of data collection and analysis: quantitative and qualitative.
Quantitative research attempts precise measurement of phenomenon, attitudes and
behaviour and answers questions related to how much, how often, how many, when
and who (Cooper and Schindler, 2007). Quantitative research involves coding,
categorization and reduction of the gathered data to numbers so that statistical
analysis can be conducted based on the quantitative tallying of events or opinions,
called frequency of response.
Qualitative research on the other hand aims to achieve an in-depth understanding of a
situation by using techniques that seek to describe, decode, translate and explain the
meaning, not the frequency of the occurring phenomena (Ghauri and Gronhaug, 2007)
Qualitative research seeks to develop an understanding by gathering data which
provides a detailed description of events, situations and interactions among people
and things providing depth and detail.
The main difference between quantitative and qualitative research is not of ‘quality’
but of procedure. In qualitative research, findings are not arrived at by statistical
methods or procedures of quantification. Normally, the basic distinction between
quantitative and qualitative research is considered to be that quantitative researchers
employ measurement and qualitative researchers do not (Layder, 1993; Bryman and
Bell, 2003).
In a qualitative research, the researcher is significantly involved in collecting and
interpreting the data. By contrast, with quantitative studies, the researcher who
interprets data and draws conclusions from it, may or may not be the data collector
and often has no contact at all with the participant. The involvement of researcher
with the collection of data has both advantages and disadvantages. On the one hand
where involvement with data collection could lead to biased results, on the other it
allows greater detail and better understanding. One potential advantage of using
quantitative research is that the results so obtained can be generalised to a larger
population, which is amiss in the qualitative research owing to comparatively smaller
sample sizes. Both the research methods have their advantages and disadvantages and
neither is better than the other. The use of either or both in combination is context
dependent.
The choice of data collection depends on the overall judgement of which type of data
is needed to answer a research problem. So, it is the type of answers that we are
looking for which decide the type of analysis to be undertaken. In words of Jankowicz
(1991), which methods and techniques are most suitable for which research (project)
depends on the research problem and its purpose.
Usually when the research problem is concerned with building the theory, qualitative
methods of analysis are chosen. The reason behind this choice is that these methods
allow uncovering and understanding of a phenomena about which little is known. This
may also be the case when studying the phenomena is difficult through quantitative
methods. However, use of quantitative methods is most preferable when the emphasis
is on testing different hypothesis that were build using the qualitative research
methods. Quantitative methods allow acceptance or rejection of these hypothesis in a
logical, consistent manner by studying/ testing it on a large population.
As described earlier, the qualitative research methods allow the researcher to explore
and probe deeply into the attitudes and behaviours, providing a better understanding
of a given context and underlying assumptions. Being flexible and unstructured (as
compared to quantitative methods), the qualitative methods employ a limited number
of observations trying to explain different aspects of the problem area with an indepth analysis.
The present study is undertaken with a view to understand how the staffing pattern
differs in the subsidiary compared to the headquarters due to the effect of social
culture of a country. This requires understanding why people take the decisions they
do (meaning) and how do they do it (process). And since this requires studying
people’s intentions, motivations and subjective experiences related to culture and
staffing, qualitative data would best answer the problem at hand. To be able to gather
data about the people’s experiences, beliefs and values which influence the staffing
decisions, it is required that various other factors leading to these values and attitudes
be studied and examined. The multiplicity of the dimensions and relationships
involved would require providing rich and detailed descriptions of the particular
contexts illuminating important issues of the specific cases.
There are a number of techniques and methods for quantitative data collection, among
which case studies, surveys, focus groups, interviews are the most commonly used.
As said earlier, different methods are suitable for different types of studies and it is
the research problem and the research objectives that indicate the type of method to be
used (Ghauri and Gronhaug, 2007).
Case studies are used for descriptive and explorative research, when the phenomena
under investigation are difficult to study outside their settings and when the variables,
which are usually many, are difficult to measure. In a case study, the primary sources
of data collection include verbal reports, personal interview and observation. Case
studies are the preferred approach when questions relating to how and why are to be
answered.
Focus group is a small group of people interacting with each other to seek information
on a small (6-10), focussed number of issues under the direction of a moderator
(Stewart and Shamdasani, 1990; Bryman and Bell, 2003). The use of focus group as
data collection is most suitable when the opinions and views of people about a set of
topics/ issues is to be determined. Though quick, flexible and inexpensive, this
method could lead to argument and biased views, influenced by those in the group.
Surveys refer to a method of data collection that utilizes questionnaires or interview
techniques for recording the responses. This is the most preferred tool when the
opinions, attitudes of the respondents are to be understood. Surveys usually make use
of structured questionnaires and hence leave little or no room for the respondents to
add to the information sought from them.
Interviews are often considered as the best data collection methods because they
involve real interaction between the researcher and the respondent. Interviews refer to
face-to-face verbal exchanges in which one person: the interviewer, attempts to obtain
information, opinion or beliefs from another person: the interviewee (Ghauri and
Gronhaug, 2007). Being directly involved in the data collection, the researcher
through interviews is able to obtain information about personal, attitudinal and value
laden material.
Interviews may be structured or unstructured. Structured interviews follow a standard
interview format with questions coded beforehand and fixed response categories. On
the other hand, unstructured interviews allow full liberty to the interviewee to discuss
reactions, opinions, experiences etc. The questions usually are unstructured and not
coded beforehand. While it is easy to analyse structured interviews, the unstructured
are usually difficult not only to analyse but also generalize. Another variant, semi
structured interviews differ from the regular interviews in the sense that the topics and
issues to be covered, sample sizes, people to be interviewed and questions to be asked
are determined beforehand. As a result, semi structured interviews allow uniformity
while striking a balance between detail and structure.
Interviews can be conducted face to face, via telephone or through the internet.
Advantages of telephone interviews among others are that the interviewer can take
notes and work actively during the interview without distracting the interviewee.
Another advantage is that telephone interviews increases the likelihood of finding a
time and date from the tight schedule of the interviewee when he/ she can be
interviewed. However, a potential drawback of telephone interviews is the threat of
not having 100% of the interviewee’s attention since the person could also be working
on other things simultaneously. But, due to the relatively low degree of complexity in
the interview the advantages of telephone interviews were decided to outweigh most
disadvantages.
The research question here, as stated earlier requires in-depth understanding of the
phenomena based on the behaviour, values, attitudes of the people so the most
appropriate technique is interviewing as it allows understanding the phenomena in the
context of the participants and the meaning they attach to different aspects, in their
own words and expressions.
Reliability, Validity, Generalization:
Given the small number of companies involved, naturally, the reliability of the
empirical work in terms of generalization value is low. This is true for most
qualitative and/or explorative/experimental studies. This would probably not have
been any different with 10, 15 or even 30 companies since qualitative data due to its
depth has a low generalisation value. The validity of the empirical work is considered
high due to the first hand data collection by the researcher, which is common for most
qualitative studies. Qualitative studies typically aim at producing valid results.
Furthermore, the interviews were recorded and the interview transcripts were later
sent to the interviewees as an attempt to increase validity of data so collected. A
further indication of high validity is that interviewees dedicated enough time and
focus to the interviews in order to produce solid information. All the interviews were
conducted at times most convenient to the interviewees and where they were
undisturbed and had good time to reflect over their answers. Furthermore, the
interview form of telephone interview made it possible to make notes and comments
about replies without disturbing the interviewees.
Samples:
When conducting a research it is impossible to collect data from everyone concerned
with the thesis topic unless the research population is very small e.g. a small group of
people. Hence collecting data from portion of the population and inferring something
about the larger group/ population is sampling. Hence, the basic idea of sampling is
that by selecting some of the elements in the population, conclusions are drawn about
the entire population, where a population is the total of all elements about which we
wish to make some inferences. The appropriate number of samples depends on type of
research question, type of qualitative approach, available resources etc. Since the
qualitative research attempts focusing in great depth on few phenomena hence the
sample sizes are small.
The present study involves studying the staffing procedure in Indian subsidiaries of
Danish companies and the headquarters in Denmark. Hence, from among all the
subsidiaries a sample of six was chosen and interviews were conducted with the
respective people. The following section provides a description on how the companies
were located, contacted, selected and interviewed both at the subsidiaries in India at
the headquarters in Denmark.
Collecting the data
Locating the Companies
In order to collect primary data companies that fitted the criteria for the project had to
be identified. The criteria on the basis of which the companies were selected was that
they should have a subsidiary office in India, with headquarter office in Denmark and
also that the subsidiary office should have been operational for at least five years. The
time dimension was added with a view that the subsidiary office would have enough
experience about staffing and hence would be able to contribute to the quality of data
so collected.
To obtain a list of organisations that match the criteria mentioned above, an email was
sent to the commercial department at the Embassy of Denmark in New Delhi, India,
with a short description of the objective of the undertaken study. A list of total 63
organisations with additional information about them was sent to me, from among
whom 18 matched the laid down criteria. From among these 9 were selected after
making a short study of their backgrounds, fields of work etc. After making the
selection, next step was contacting the companies.
Contacting the companies
It was considered more appropriate to call the organisations than sending an email as
it would be better to explain the objective of the study verbally than in writing and
also address concerns and questions about the same in a better manner. Out of the
chosen 9, 3 responded in the negative with an excuse of not being interested in
participating in the study. Out of the 6 companies who were interested in being a part
of the study, the concerned people from the headquarter of one of the organisations
opted out due to lack of sufficient time and hence only 5 companies were interviewed.
The next step involved conducting the round of interviews with the concerned people
in the remaining companies who were interested in being a part of the study.
The method in which the interviews were conducted varied on a case to case basis,
though the structure of the interviews remained the same. This was not only due to the
busy schedules of the people being interviewed but also as the companies were
scattered all over the country, especially in India making it not so viable to travel all
that long a distance. Hence the interviews so conducted were a mix of personal and
telephonic. In the case where interviews were conducted on phone, a dictaphone was
used to record them (by permission) so that none of the details from the interview are
missed.
Conducting the interviews
Two rounds of interviews were conducted with the concerned people. The first round
of interviews conducted were unstructured, with slight prompting to get an
understanding of the organisation, its setting and the staffing procedure so followed.
The second round of interviews were based on a structured format (included in the
appendix) to enable gathering data that could be compared to each other. Later, a
transcript of the interviews so conducted was sent to the interviewees to ensure that
their responses had been understood correctly. Following is the list of companies
contacted and interviewed with a brief about their field of work, number of employees
and other relevant information regarding the interviews so conducted.
Company A

A leading northern European consulting group which provides services within
the fields of engineering, environmental science and economics

Subsidiary is involved with IT, software, digital mapping and remote systems

With companies and offices in 36 countries, it employs about 4,800 people
world over of which 2,500 are a part of headquarter and about 315 are
employed at the subsidiary office

Human resources department at the headquarter is fully developed with about
60 people catering to the various Human Resource needs

The Human Resources department at the subsidiary employs about 20 people
who work in close consultation with other employees to cater to the Human
Resource needs
To collect data about the staffing procedure of the subsidiary, the head of Human
Resources department was interviewed. Both the rounds of interview were conducted
in person and though the unstructured interview lasted about an hour, the second,
structured interview being specific, took a little more than 30 minutes. At the
headquarter, a human resource executive specialising in recruitment and selection was
interviewed. Here, both the first and second interviews were telephonic and while the
unstructured interview took about 45 minutes, the structured interview was over in 25
minutes.
Company B

Working within the field of energy optimisation through catalytic
processes in chemical plants

With offices in 9 countries, it mainly employs experienced and skilled
professionals within mechanical engineering, and technical services

The organisation has more than 2000 people working with it of which 90 are
employed at the headquarter and about 60 form a part of the Indian subsidiary

The Indian subsidiary office is responsible for the completion of the projects
outsourced to it by the headquarter

The Human Resources department at the headquarter is small with just 9
people involved with catering to the various Human Resource needs

The Indian subsidiary has a very small (just 3 people) Human Resource
department, with the subsidiary head being the ultimate authority
The Human Resources manager was interviewed at the subsidiary to collect data
about the staffing process. Here, the unstructured interview was conducted face to
face and took about 45 minutes however the structured interview had to be conducted
via telephone due to the busy schedule of the interviewee and lasted about 25 minutes.
At the headquarter an assistant Human Resources manager was the interviewee. Both
the unstructured and structured interviews were telephonic due to the lack of time and
lasted for 45 and 30 minutes respectively.
Company C

Global and independent research and development organisation dedicated to
work within the fields of water, environment and health

Offices (including subsidiary) in about 23 locations across the major
continents

About 750 employees worldwide majority being professional engineers and
scientists

There are about 450 employees working at the headquarter and about 50 in the
Indian subsidiary

Human Resources department at the headquarter is not very developed
performing the very basic Human Resource functions

The subsidiary in India has no Human Resources department, with the
subsidiary head being responsible for staffing decisions
In the absence of a Human Resources department at the subsidiary, the subsidiary
head was interviewed regarding the staffing practices so followed. The unstructured
and structured interviews were conducted in person and lasted about 45 and 30
minutes respectively. At the headquarters, Head of human Resources department was
the interviewee. Both the unstructured and structured interviews had to be conducted
via the telephone as the time for a personal appointment could not be spared. While
the former interview took about 40 minutes, the latter was wrapped up in 25 minutes.
Company D

Family owned clothing company

17 offices around the world apart from more than 4,100 shops in 41 countries

Employs more than 39,000 people worldwide in the fields of designing,
marketing and selling with about 3,000 at the headquarter in Denmark and just
9 at the Indian subsidiary office

The subsidiary acts as a buying and liaison office for the headquarters and
works in close coordination with it

Human Resource department at the headquarter is fully developed and reports
directly to the CEO

The subsidiary does not have a Human Resource department; the subsidiary
head takes care of all the Human Resource requirements
In the absence of the Human Resources department, the subsidiary head who takes
care of all the Human Resources requirements was interviewed about the staffing
practices followed at the Indian subsidiary of organisation D. Though the unstructured
interview was conducted over the telephone lasting about an hour, the structured
interview was a face to face interaction which was over within 20 minutes. At the
headquarters, a management trainee was assigned by the head of recruitment to
answer my questions. The unstructured interview took about 50 minutes. For the
structured interview, the head of recruitment was the interviewee and the interview
lasted for a little more than half an hour.
Company E

One of the world's leading producers of food ingredients, enzymes and biobased solutions

A global company with activities at some 80 locations in more than 40
countries

9,200 employees in all with 350 working at the head quarter in Denmark and
50 in the subsidiary office in India, of which about 85% are scientists and
researchers

Human Resources is regarded as a corporate function and maintained by an
open dialogue across the organisation

The Human Resources department reports directly to the CEO and CFO (at
headquarters)

The subsidiary has a very small Human Resource department comprising of
just 3 people, reporting to the subsidiary head
Due to the packed schedule of the people working in the Human Resources
department of the Indian subsidiary, the subsidiary head was interviewed for both the
unstructured and structured interview which were face to face interactions lasting for
40 and 25 minutes respectively. At the head quarter, the Human Resource manager
was the interviewee. Here too both the interviews were conducted in person and lasted
about 45 and 25 minutes respectively.
Findings
Organisations
Org. A
Org. A
Org. B
Headquarter
Subsidiary
Subsidiary
Org. B
Org. C
Headquarter
Subsidiary
Org. C
Org. D
Headquarter
Subsidiary
Org. D
Org. E
Org. E
Headquarter
Headquarter
Subsidiary
Mix,
varying
with kind
&position
of job
Hard
criteria
Mix,
varying
with the
kind of job
Hard
criteria
Hard
criteria
Preference
for soft
criteria
Mix,
varying
with the
kind of job
Hard
criteria
Preference External
for
sources
internal
sources
Preference
for
internal
sources
External
sources
External
sources as
small and
growing
External
sources
Mix,
depending
on
External
sources
Preference External
for
sources
internal
sources
Preference
for
informal
and
network
based
Formal and
structured
recruitment
channel and
methods
Mix of
formal and
informal
Formal and
structured
recruitment
channel and
methods
Preference
for formal
Formal and
structured
recruitment
channel and
methods
Preference
for
informal
and
network
based
Formal and
structured
recruitment
channel and
methods
Mix of
formal
and
informal
Formal and
structured
recruitment
channel and
methods
Standardised
Standardised
Non-
Standardised
Non-
Standardised
Standardised
and job
specific
selection
standardised
Standardised
and job
specific
selection
Non-
and job
specific
selection
standardised
and job
specific
selection
standardised
and job
specific
selection
and job
specific
selection
Standardised
and job
specific
selection
Propositions
||
V
Recruitment
and Selection
Criteria:
Hard/ Soft
Sources of
Recruitment:
Internal/
External
Recruitment
Channels and
methods:
Formal/
Informal
Selection
Methods:
Job specific,
standardised/Non
standardised
Hard
criteria
selection
methods
recruitment
channels
selection
methods
requirement
selection
methods
Hard
criteria
As can be seen in the table above, there are some differences among the recruitment
and selection patterns not only in the subsidiaries in India and the headquarter in
Denmark, but there are also significant differences among the data collected from the
subsidiaries.
A glimpse into staffing the Indian subsidiary
The data collected from the Indian subsidiaries indicate a preference for job related
knowledge as a criterion for recruitment and selection. While the recruitment channels
and methods were a mix of network based and formal, the subsidiaries were more in
favour of filling the vacancies from within the organisation. It was also found that the
selection methods followed were non-standardised.
The foremost criterion for the subsidiaries was the job knowledge, competencies and
job related abilities. Additionally, the subsidiaries reported that while recruitment it
was ensured that the selected candidate was someone who suited the current group of
employees primarily in terms of age so as to maintain and the strengthen the in-group
feeling that the employees shared. It was tried that the mismatch brought out by age
difference among employees be avoided unless it was the requirement of the position
in question for e.g. when looking for a project head. The emphasis on job related work
experience was overlooked in the cases when due to non availability of a suitable
candidate either from the current group of employees or the employee referrals, the
organisation resorted to campus placement. According to them it was easier for them
to hire and train a fresher than hire an experienced worker and mould him/ her to suit
the organisation’s requirement.
During the interviews conducted it also came to light that the background of the
candidates was given importance and at times lead to swaying of selection decisions
especially when a candidate had studied at a renowned university/ institute.
Interviewing the candidate was a common practice when making the selection
decision and almost no use of any ability, personality tests was reported by the
subsidiaries. However, to get a better idea of the candidate’s personality, attitude and
behaviour the organisations enunciated that instead of a single interview they
conducted a two and at times even a three tier interview.
36
The exceptions:
Of the five subsidiaries interviewed two did not stress entirely on job knowledge,
competencies and job related abilities. One (organisation A) insisted on the
interpersonal, social skills being equally important for the job performance as the
work in the organisation was divided in teams requiring that employees not only
contribute within the team but also coordinate among the teams, while the other
(organisation D) thought the interpersonal skills to be a tad more important due to the
fashion and garment industry they were a part of and also since the subsidiary acted as
a buying office for the headquarter which required dealing with a lot of people.
As for the sources of recruitment, organisation C had no option but to look for
potential employees in the external recruitment market as the current employees were
not enough to handle the work pressure and so hiring from within was used only on a
temporary basis till someone qualified enough could be found. However like in other
subsidiaries organisation C too gave priority to candidates applying for the post
through personal networks. While in organisation D both internal and external sources
were preferred depending on the kind of post to be filled. According to the
interviewee the search for administrative staff was usually in the external sources like
job blogs or through personal networks but for designers the present pool of
employees was where the search began and ended.
While the subsidiaries primarily relied on interviews as a tool for selection, both
organisation A and E combined the information acquired by the candidate through
interviews with special ability tests developed at the headquarters to analyse the job
skills and competencies. In their view these tests had provided them with better
employees over the years.
The case for staffing at the Danish headquarters
The data collected at the headquarters of the multinational enterprise indicate
inclination towards external sources of recruitment, almost never utilising the internal
ones. The recruitment channels and methods are formal, wide spread and the selection
37
methods are standardised and job specific. However the organisations are not quite
unanimous on the importance they attach to the recruitment and selection criteria.
The headquarters unanimously agreed on making use of the organisation’s website,
job portals and in very few cases the print media as the source of advertising the
vacant posts. The selection decisions are not only based on the information collected
about the applicant through the conducted interviews, but the information is
supplemented by the various skill tests that predict the applicant’s on the job
performance making the selection decision more objective
Out of the five headquarters interviewed, three were outright in accepting their
preference for job knowledge, competencies and job related abilities as the
recruitment and selection criteria. However the other two: organisation B and D
favoured a mix of both job knowledge, competencies, job related abilities and
interpersonal, social skills. While in organisation B the mix was preferred due to the
presence of teams requiring contribution to and coordination among them,
organisation D settled upon a mix of both job and interpersonal skills as its area of
work required a lot of back and forth coordination among the various departments.
The comparison
From the table of findings and description above it is evident that differences exist
between the staffing in the subsidiaries in India and at the headquarters in Denmark.
While the staffing procedure is standard at the headquarters, the procedures followed
at the subsidiaries seem to be more non standardised and informal. The differences are
also evident in the subsidiaries’ inclination towards internal recruitment sources and
employee referrals and the preference of headquarters for the external labour market.
The value placed on the criterion for recruitment and selection and the selection
method vary among subsidiaries and headquarters on a case to case basis.
The following section sheds some light on the possible reasons for these differences in
the staffing procedures followed at the headquarters and at the subsidiary and also
analyses to what extent these differences are brought about by the respective cultures.
38
Discussion
At the outset of this research it was assumed that the differences in the staffing
procedure followed by a subsidiary and headquarter are influenced by the respective
national cultures. To test the hypothesis, data about the staffing practices was
collected from the subsidiaries operating in India and compared with similar data
collected from the headquarters in Denmark. The findings point out that there are
differences in the staffing procedures followed by the subsidiaries and headquarters.
First the theory and findings are juxtaposed and later it is analysed whether national
culture influences staffing and if so then to what extent.
Theory Vs Findings
Applying the findings of Hofstede (1980), Trompenaars (1995), House et al (1999)
about the Indian culture to the theoretical model of Aycan (2005) it was proposed that
organisations use a mix of hard and soft criteria, rely both on internal and external
sources for recruitment, blend network based, informal and formal recruitment
channels, methods and employ both standardised and non – standardised selection
methods.
The data collected from the subsidiary offices in India indicate a preference for hard
criterion for recruitment and selection. Though the recruitment channels and methods
used were found to be a mix of formal and informal but the collected data revealed
that the subsidiaries were more in favour of filling the vacancies from within the
organisation. The subsidiaries also relied a great deal on employee referrals for filling
the vacant posts. It was also found that the selection methods followed were nonstandardised, with no use of job related tests, emphasising on interviews as a major
selection tool.
The summary of findings doesn’t seem to entirely match up to the theoretical
assumptions. The assumption about the use of a mix of hard and soft criteria for
recruitment and selection has been falsified as the subsidiaries prefer to use hard
criteria. Also, opposed to the proposition of the selection methods being a mix of
39
standardised and non-standardised, were found to be non-standardised with almost no
use of ability or personality tests to supplement the interview information. It was also
found that subsidiaries dealt with the recruitments and selections on a case to case
basis, going easy on the rules and procedures. The inclination of the subsidiary offices
for network based and informal recruitment methods and channels more or less
conformed to the assumptions.
For the headquarter offices in Denmark based on the findings of Hofstede (1980),
Trompenaars (1995), House et al (1999) according to the theoretical model of Aycan
(2005) it was proposed that the criteria used while recruitment and selection are a mix
of hard and soft, there is a preference for external recruitment sources, recruitment
channels and methods are formal, structured and the selection methods are a mix of
standardised and non-standardised with a preference for non-standardised.
The findings more or less conform to the laid down theoretical assumptions. Apart
from the criteria used for recruitment and selection and the choice of selection
methods, the assumptions about the recruitment channels, methods and sources prove
to be valid. Only two of the five organisations preferred a mix of both hard and soft
criteria for recruitment and selection. The findings also reveal that the selection
methods were highly standardised and there was a great reliance on job related tests in
addition to the interviews, which too were an important part of the whole selection
method.
To a certain extent it can be said that the assumptions about the staffing procedures
followed at the subsidiary and the headquarter hold true. This implies that the culture
of the respective countries influenced the staffing practices. However to arrive at a
conclusive answer on the role played by national culture on the recruitment and
selection patterns followed at the subsidiary and headquarters it is important to
analyse the possible reasons that could account for the differences.
An Analysis
It was observed that both at the subsidiaries and headquarters, apart from the
recruitment and selection criteria which was directly related to the job performance of
40
the candidate, the preference for sources, methods, channels for recruitment and
selection had traces of being influenced by the national cultures.
According to the findings both the Indian subsidiaries and the Danish headquarters
preferred hard criteria for recruitment and selection. This seems to be for the reasons
other than culture since the sample primarily included firms which employed a greater
degree of scientists, engineers and researchers and for whom having adequate job
knowledge, competencies and job skills was important. This was same for
organisations irrespective of the fact whether they were a subsidiary office or
headquarter. The ones who preferred a mix of hard and soft criteria or soft criteria for
recruitment and selection were those where dealing with many people and
departments was an essential part of their nature of work. However, if the sample had
probably included organisations from a different industrial sector like consumer
goods, health industry or service sector the effect of culture on criteria used for
recruitment and selection could be studied in greater detail.
While the headquarters strictly relied only on formal methods, channels and external
sources of recruitment being tolerant to uncertainty, the subsidiaries depended on
network based, informal recruitment channels and methods. Though the reasons for
relying on the internal labour market were different however the collectivist
undercurrent among the subsidiary staff became evident. In certain cases when
recruitment from the existing pool of employees was not possible, the most trusted
external sources were considered to be referrals from the people currently employed
in the organisation. On the contrary the headquarters not only detested the internal
labour market, they also reported that employee referrals or candidates from the
network were not seen as in good taste. These differences probably have their roots in
the cultural values of collectivism in the Indian culture and individualistic Danish
culture with the former being slightly more risk averse than the latter.
However, these differences could have another side to them too. The subsidiaries
being small in size do not strictly adhere to the guidelines and laid down procedures
for recruitment increasing the subjectivity of the business decisions. Also, most of the
subsidiaries being small in size either do not have a human resource department or
have a very small minimally functional department. In such a situation, the
41
subsidiaries depend greatly on their subsidiary head who is the ultimate authority for
all business decisions. This infuses greater subjectivity into subsidiary operations. The
headquarters on the other hand not only strictly adhere to the laid down guidelines but
also have fully functional human resource departments that take care of the staffing
function completely without any of the higher authorities requiring to censor the
process.
Also, at times the area of work of the subsidiaries is such that the external sources of
recruitment do not provide the human resources with the requisite skills. This leaves
them with no option but to look for employees from within the current pool or search
for the employee through the word of mouth in their professional networks. The
subsidiaries also reported that in situations when the work was more than the current
employees could handle, they had to look for new employees in the external markets,
which was also the case when they wanted to expand their operations.
The subsidiaries relied greatly on the interview as the selection tool since at times
there were no appropriate job related tests that could predict the candidate’s on the job
performance. In instances where the tests were available that could assess the
candidates for the required skills, subsidiaries reported that those tests were either not
applicable to the Indian context or did not yield desirable results.
From the above analysis it thus appears that several reasons can singularly or in
combination be attributed to help explain the differences in the findings.
Conclusion
In the converging globalising world, the divergent cultural streak is still evident.
Culture with its set of assumptions provides answers to universal problems, which not
only guide how to survive in the world but also put forth the most appropriate
behaviour for certain situations. Being ingrained in the people it is difficult to separate
them from their culture. Culture is an integral part of the environment in which an
organisation functions. However, lacking precise measurement and objectivity it
infuses a sense of uncertainty and hence is often disregarded by the multinational
enterprises as being unimportant.
42
The cultural traces are evident in both the subsidiaries and the headquarters’
preferences for the sources, methods employed for recruitment and selection. The
sources and methods for recruitment and selection followed in the subsidiary were
informal, non - standardised and network based. On the contrary, the headquarters
employed standard, formal sources and methods for recruitment and selection. But,
the criteria for recruitment and selection probably being very organisation/ industry
dependent and directly related to the job, it seemed was not influenced by culture.
However to conclude that the differences in the staffing patterns followed at the
subsidiary and the headquarters are solely a product of culture would be wrong. As
elaborated in the previous section, there are other factors in the external environment
of the organisations that guide the business decisions. The presence of these factors
upon which the organisations have very little or no control, force them to take
decisions that cannot be justified by or attributed to culture alone.
Thus, from the findings and discussion it can be concluded that the culture is an
influencing factor but may or may not be the only factor based on which business
decisions are taken. Cultures guide behaviours which explain the preferences of
people. However, being too idiosyncratic and abstract culture lacks the concreteness
required to base the business decisions entirely on, especially in a fast paced and
highly competitive corporate world. In the business world where decisions are based
on precise calculations and expression in numbers, culture is too soft a concept sans
enough potential to make the objective business world bow down to its subjectivity.
43
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