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Mismanaging cultural differences can render otherwise successful managers and organisations ineffective when working across cultures. As stated byOsland (1990, p. 4) “The single greatest barrier to business success is the one erected by culture”. Hofstede (1983) defines culture as “the mental programming of the mind which distinguishes the members of one human group from another” (Hofstede 1983 p. 25). Through the comparison of Chinese culture and Australian culture using Hofstedes five cross-cultural dimensions: power distance, uncertainty avoidance, masculinity, individualism, and long-term orientation an insightful view into the differences and similarities of the cultures can be obtained (Chong & Park 2003).
Human Resource Management (HRM) activities such as: recruitment and selection, career planning and development, employee motivation, and compensation and benefits need to be performed in alignment with national culture as effectiveness of a human resource management practice hinges on the degree to which it fits the values and beliefs of people in the host country. By exploring the differences and similarities of Chinese and Australian culture from a HR perspective strategies aimed at achieving organisational goals can be better achieved.
The inherent weaknesses of Hofstedes framework will also be discussed to emphasise the importance of other methods for determining culture.
Greet Hofstede’s (1980) landmark study involved more than one hundred thousand IBM employees in forty countries. From those results, and later additions, Hofstede developed a model for classifying national cultures and analysing work behaviour according to five underlying dimensions: power distance, uncertainty avoidance, masculinity, individualism, and long-term orientation (Chong & Park 2003). Hofstedes analysis of each country can provide a better understanding into the national culture that is specific to each country.
The significant findings of Hofstedes analysis of Australia include a low power distance score of 36 (ITIM International 2003). Societies with low power distance are characterized by the norm value that inequalities between people should be minimized, and, to the extent that hierarchies exist in such societies and their organizations, they exist only for administrative convenience. Subordinates and superiors regard each other as like people, who have equal rights and representation (Hofstede 1983).
In comparison China has a relatively high power distance of 80 (ITIM International 2003). By contrast, high power distance societies are characterised by the acceptance of inequality and its institutionalisation in hierarchies which locate people in their “rightful places”. In high power distance societies, superiors are expected to lead and make decisions, and subordinates are generally afraid and unwilling to disagree with their superiors (Hofstede 1983). As a result of the significant difference in power distance between Australian and China Human Resource activities such as performance appraisals will require different approaches. In Australia and many western cultures performance appraisals are generally linked to the job description and individual career development plans. In Australian 360 degree feedback is often incorporated using feedback from management and peers. Constructive criticism is also another important component in the performance appraisals used in Australia which is vital for identifying gaps in learning and development and is accepted by employees as the norm (Harrison 1995).
By contrast performance appraisals in China are less frequent as both managers and workers in Chinese enterprises want to avoid blunt confrontations; it is understandable that they would try to minimise the frequency of such conflict-prone encounters in the workplace (Huo 1995). Peer evaluation, frequently used in Australian organisations, virtually does not exist in the China. This may be attributed to the traditional authoritarian leadership style prevalent in Chinese enterprises where only supervisors are deemed qualified to evaluate subordinates’ performance (Huo 1995). Performance appraisals generally involve two-way communications which is not embraced by Chinese culture as the large power distance found in China indicated that to challenge authority of superiors is not considered appropriate for subordinates (Huo 1995). Therefore when conducting a performance appraisal in China it is expected that the evaluated will be more subjective. A straight forward form of appraisal would be better received and employee participation should not be forced.
Of significant interest is Australia’s high individualism ranking of 90 (ITIM International 2003) . High Individualism implies a society believes that people should largely remain independent from groups, and that people should have a self-concept of being an independent individual rather than a dependent member of a group(Harrison 1995). In comparison China ranked extremely low with a score of 20 in the individualism ranking (ITIM International 2003). This is as a result of the society fosters strong relationships where everyone takes responsibility for fellow members of their group with an emphasis on a Collectivist society as a result of the Communist rule (Hofstede 1980). As a result of the different stance of each culture on individualism human resource activities such as compensations and benefits will need to be approached in a different way.
In Australian rewards are geared towards pay for performance which motivates the individual to stand out from the crowd in particular at more senior management levels. Compensation is not just related to salary but can include bonuses, commissions, and other merit based reward programs for individual contributions. In contrast Chinese tend to focus on the goals of the collective rather than individual goals. Group approaches have been a dominating influence on Chinese social and working life, including team work, group decision making, group reward, group cohesiveness and group consultation (Satoe & Wang 1994).
Chinese employees do not want to stand out from the crowd. Thus it has been suggested that Western business practices, such as personnel incentives, do not work (Myers, 1987). Therefore when conducting business within the Chinese culture compensation and benefits should be based on a collective theory where there are less individual incentives rather a focus on the performance of the group or work units. In a field experiment which combined team duties with group incentives, the team responsibility system proved to have a positive effect on members’ expectancy, achievement attribution, morale and satisfaction (Satoe & Wang 1994).
The great distinction between Australia’s score of 31 for Long Term Orientation compared with Chinas score of 118 suggest great cultural differences (ITIM International 2003). Long Term Orientation is a measure of the degree the society embraces, or does not embrace long-term devotion to traditional, forward thinking values. As Australia has a low score this indicates that change can occur more rapidly as long-term traditions and commitments do not become impediments to change (Harrison 1995). In contrast to this a country with a high score such as China value long-term commitments and respect tradition. This is thought to support a strong work ethic where long-term rewards are expected as a result of today’s hard work (Harrison 1995). These types of diverse cultural views towards long term orientation will impact of the way human resource activities such as recruitment and selection are carried out. In Australia it is common for employees to have several difference employers in there working career and even several changes in industry.
Recruitment and selection practises in Australia are aimed at aligning the best fit between employees and the organisation in terms of goals and competencies. Recruitment and selection in Australian generally includes interviewing, psychometric tests, assessment centres and other measures of assessment. In contrast with this Chinese employment pattern has traditionally been life employment with three guarantees “guaranteed job assignment, guaranteed pay irrespective of performance and guaranteed tenure of senior positions” (Lewis 3003) . Selection criteria seem quite different from the West.
For example, Easterby-Smith et al. (1995) found that selection criteria for managerial appointments in their case study organisations were “good moral practice; adequate competence; working hard and excellent performance records; political loyalty and harmonious relationships with others”. Longevity in a job in Australia is not necessarily seen as a good thing and can be construed as complacency whereas in China it aligns with the cultural drivers of loyalty and tradition. When conducting recruitment and selection in China it must be kept in mind that they traditionally do not place too much emphasis on the interview and almost never employ psychometric tests and assessment centres. Rather than acting out against the traditional job for life concept by replacing current staff with more qualified candidates managers should perhaps ensure sound training and development programs are in place to achieve a fit between employee and organisation.
Hofstedes measures of Masculinity and uncertainty avoidance for both Australia and China were similar in score. Masculinity stands for a societal preference for competition, while femininity represents a tendency to place relationships with people above money to help others, to care for the weak and to preserve quality of life (Harrison 1995). Australia scored 61 compared with Chinas score of 66 (ITIM International 2003). Similarly the measurement of uncertainty avoidance which indicates to what extent a culture programs its members to feel either uncomfortable or comfortable in unstructured situations are quite close in score with Australia at 51 compared with China at 30 (ITIM International 2003).
The small difference in uncertainty avoidance suggests that within Chinese culture there is a more relaxed and tolerant attitude towards the unfamiliar as compared with Australia where there is less tolerance towards uncertainty and ambiguity. This may impact on human resource activities such as career planning and development. In Australia career planning and development is generally quite structured and directed as employees like to have a clear career path while in Chinese culture they more comfortable with a less structured approach to career planning and development and expect they career will progress in time.
Despite its widespread familiarity and influence, Hofstede’s work has been extensively criticized. One reason is that he used the employees of a single large multinational company to represent the cultures of different nationalities. It is clear that such a sample, no matter how large, may not be representative of the respective countries’ national cultures (Mcsweeny 2002). The national culture of China as identified by Hofstese is quite general and it must be kept in mind that the averages of a country do not relate to individuals of that country (Mcsweeny 2002). There are always exceptions to the rule and Hofsteds analysis does not allow for this and therefore should only be taken as general guidelines. It must also be kept in mind that these studies were conducted over 25 years ago. Due to the inherent weaknesses of the frameworks discussed it is vital that other factors be taken into consideration when analysing national culture. It is important to remember that the culture of a country changes over time, either by internal or external influences.
Although the measures identified that China has a collective society and it is though as a generalisation that that collectivists are more cooperative was not supported by experimental results. It was found that subjects from the more individualistic region, Beijing, were more cooperative in working toward mutually beneficial outcomes than were subjects from the more collectivist region, Wuhan (Koch & Koch 2007). This research alludes to the conclusion that the Chinese generally have a collective society within the community they are familiar with but to some degree are less willing to have a collective frame of mind with a group they are less familiar with.
This type of social behaviour would be important for management of Chinese culture in circumstance such as group work where participants may not be as eager to participate as once thought within unfamiliar groups. With the inherent weaknesses of Hofstedes framework it is important to consider a broader range of issue in order to obtain an accurate and current insight into national culture. As Coen Heijes states “no matter how interesting standardised dimensions may be, without a specific knowledge of history, language and education, cross-cultural understanding is doomed from the start” (Heijes 2007 p.94).
Hofstedes five cross-cultural dimensions: power distance, uncertainty avoidance, masculinity, individualism, and long-term orientation provide an insight into the national culture of both Australia and China. National culture is important to consider when performing human resource activities as the effectiveness of a human resource management practice hinges on the degree to which it fits with the values and beliefs of people in the host country.
Human Resource activities that need to be aligned with cultural factors include: recruitment and selection, career planning and development, compensation and benefits, and performance appraisals. In comparing the performance appraisal process, Australians are likely to be more responsive to a 360 degree type feedback with much interaction between managers and subordinates where Chinese employees are likely to be more responsive to a more subjective performance appraisal with little contribution in the form of feedback from peers or personal contributions due to the difference in the power distance of each culture.
Compensation and benefits in Australia can be geared towards pay for performance of individuals and may include bonuses, commissions, and other merit based reward programs for individual contributions. Whereas in the Chinese culture compensation and benefits should be based on a collective theory where there are less individual incentives and rather a focus on the performance of the group due to difference in Hofstedes individualism measures. Recruitment and selection practices comparisons between the two countries are impacted by the difference in long term orientations.
The recruitment and selection process in Australia is important due to the frequently changing roles of employees and the importance of finding a fit between organisation and employee whereas in China recruitment and selection aligns with the cultural drivers of loyalty and tradition. When conducting recruitment and selection in China it must be kept in mind that they traditionally do not place too much emphasis on the interview and almost never employ psychometric tests and assessment centres.
The slight difference in uncertainty avoidance dimension impact on human resource activity of career planning and development. In Australia career planning and development is generally quite structured and directed as employees like to have a clear career path while in Chinese culture they more comfortable with a less structured approach to career planning and development and expect they career will progress in time. While Hofstedes dimensions cross-cultural dimensions have been critiqued as being to some degree too generalised, small sample sizes, out dated, over simplifying complex tasks. Therefore the framework discussed should only be used as a rough guide to understanding national culture. As suggested by Coen Heijes (2007) other factors such as political and legal systems, religion, education, language, ethics, and motivation among many others must be considered to obtain a current insight into national culture.
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