A Cross-Cultural Perspective On Managing DiversityAgendaCountry Profiles: UK and USSlide 4Slide 5Slide 6Slide 7Geert Hofstede Cultural DimensionsSlide 9Managing Diversity and the Transition from HRM to IHRMDiversity In The U.S. And The U.K.Managing DiversityImplications For IHRMThe Multicultural OrganizationsFlaws In The Existing IHRM LiteratureEarlier AssumptionsWrong Assumptions!New Approaches To IHRM“Bridging the Gap” United States & United KingdomReality CheckEnglish-to-English Dictionary Now What Did You Really Say…Communications StylesPerceptions VSCommunication & Work Style Challenges British with AmericansCommunication & Work Style Challenges Americans with BritishA Case StudyAstraZeneca (U.K.)Company Awards“Chemistry is a useful and transferable skill"AstraZeneca’s PolicyTotal Reward StrategyDiversityPfizer (U.S.)Global PerspectiveSlide 35RecapThe EndA Cross-Cultural Perspective On Managing DiversityInternational Human Resource ManagementIBUS 618.02March 12, 2005Khemais BoujemaAzza HararahMichel HarmsStefanie SchmidtAgenda•Introduction Comparison: United States and United Kingdom(Stefanie) •Managing Diversity The Transition from HRM to IHRM (Khemais)•“Bridging the Gap“Practical Issues and Implications(Azza) •Case Study: Pfizer and AstraZeneca Recap(Michel)Country Profiles: UK and USCountry Profiles: UK and USUnited Kingdom •Area: 244,820 sq km•Population: 60,270,708= 646 per sq mi•Age structure:–0-14 yrs: 18 %–15-64 yrs: 66.3 %–64+ yrs: 15.74 % •Pop. growth rate: 0.29 %•Fertility rate: 1.66United States•Area: 9,631,418 sq km•Population: 293,027,571 = 83 per sq mi•Age structure:–0-14 yrs: 20.8 %–15-64 yrs: 66.9 %–64+ yrs: 12.4 %•Pop. growth rate: 0.92 %•Fertility rate: 2.07Country Profiles: UK and USUnited Kingdom•Ethnic groups:–White: 92.1 %–Black: 2 %–Asian: 4 %–Other: 1.9 %•Religions:–Anglican / Roman Catholic: 66.4 %–Muslim: 2.5 %–Presbyterian: 1.3 %–Methodist: 1.3 %–Sikh, Hindu, Jewish: 2.2 % –Other / None: 26.3 % United States•Ethnic groups:–White: 77.1 %–Black: 12.9 %–Asian: 4.2 %–Native: 1.8 %–Other: 4 %•Religions: –Protestant: 52 %–Roman Catholic: 24 %–Mormon: 2 % –Jewish, Muslim: 1 % each–Other: 10 %–None: 10 %Country Profiles: UK and USUnited Kingdom•GDP: $ 1.66 trillion (2003)•GDP real growth rate: 2.2 %•GDP per capita: $ 27,700•Pop. below poverty line: 17 %•Household income:–Lowest 10 %: 2.3 %–Highest 10 %: 27.7 %United States•GDP: $ 10.99 trillion (2003)•GDP real growth rate: 3.1 %•GDP per capita: $ 37,800•Pop. below poverty line: 12 %•Household income:–Lowest 10 %: 1.8 %–Highest 10 %: 30.5 %Country Profiles: UK and USUnited Kingdom•Labor force: 29.6 million•Labor force by occupation:–Agriculture: 1 %–Industry: 25 %–Services: 74 %•Unemployment rate: 5 % (2003)United States•Labor force: 147.4 million•Labor force by occupation:–Agriculture: 0.7 %–Industry: 22.7 %–Services: 76.7 %•Unemployment rate: 6 % (2003)Geert Hofstede Cultural Dimensions•Power Distance (PDI): degree of equality / inequality between people in the country´s society•Individualism (IDV): extent to which the society reinforces individual or collective achievement and interpersonal relationships•Masculinity (MAS): extent to which the society reinforces the traditional masculine work role model of male achievement, control, and power•Uncertainty Avoidance (UAI): level of tolerance for uncertainty and ambiguity within the society •Long-term Orientation (LTO): extent to which the society embraces long-term devotion to traditional, forward thinking valuesGeert Hofstede Cultural DimensionsUK: 35 – 89 – 66 - 35 - 25US: 40 – 91 – 62 – 46 – 29 World Average: 55 – 43 – 50 – 64 – 45Managing Diversity and the Transition from HRM to IHRMLiterature ReviewDiversity In The U.S. And The U.K.The workforces in the United States, and the United Kingdom, are amongst the most racially and ethnically diverse in the world.“..and it is now projected that by the year 2050, the population of the U.S. will be evenly split between whites and non-whites” (Cox, 1994).Managing Diversity Managing diversity is an active phenomenon—it involves supervising or coordinating the differences of individuals with diverse backgrounds to ensure that the organization’s goal are effectively met.“A way of thinking' toward the objective of creating an environment that will enable all employees to reach their full potential in pursuit of organizational objectives". (Thomas, 1991)Implications For IHRMManaging diversity is at the core of the transition from HRM to IHRM.International HRM involves:•The need for a broader perspective•More involvement in employee’s personal lives•Risk exposure•Broader external influencesThe Multicultural OrganizationsLiterature findings suggest that multicultural organizations are more productive because they:•Are more able to recruit and retain culturally diverse staff•Increase their ability to attract new clientele•Create new work and management styles•Develop new patterns of personal relationships•Build structures that better meet the need of diverse staff and clienteleFlaws In The Existing IHRM LiteratureThe dominant IHRM literature is increasingly unsustainable in a rapidly globalizing business environment•Much of the existing IHRM literature is old •Much of the early research into IHRM was predicated upon limited or non representative samples•The business environment is changing rapidlyEarlier Assumptions Earlier perspectives of IHRM theories include some underlying assumptions:•IHRM is essentially concerned with the management of long-term Western PCNs employed by multinational companies• The ‘failure’ rates for such expatriates are extremely big•The ‘hardship’ of international relocation demands considerable ‘compensation’ (especially financial) to encourage Western Expatriates to accept such assignmentsWrong Assumptions!The previous assumptions are not valid today because:•The term ‘expatriate’ has a broader definition that includes short term and frequent travelers which only few studies have centered on•Several authors have suggested there is little evidence to support the the validity of high expatriate ‘failure’ rates and sharply criticized the data collection