Organizational Culture and Human Resource ManagementLabour Relations & Cultural FitCultural Fit

Organizational Culture: Organizations vision and goals Values Rules Language HabitsEverything that defines the company, and the way it works in general.

An example of organizational culture is google and its innovative work environment that had positioned them among the most popular companies for job seekers worldwide.

What is cultural fit?That suitability between the companys core values and employees

Is cultural fit important?According to Cubiks International Survey on Job and Cultural fit Most respondents (82%) said they think measuring cultural fit is important and 54% said that their organization has a clear definition of its culture.

Importance of cultural fit: Higher job satisfaction Closer identification with the company Higher chances of retaining employees Increased employees commitment Better Job performance

Ways of measuring cultural fit: Face to face interview Personality, cultural fit, and competency questionnaires Assessment centres Phone interviews C.V. Simulation exercises References Trial daysAmong others

Actions to improve cultural fit in international companies depending their strategy:

If company aims to hire locals:Make sure to establish a culture and make it available for possible future employees, offer training programs, language programs, and bring local employees to the headquarters office so they have a better understanding of the companys culture as well as building stronger connections with superiors working from home base.

If company wants to encourage homebodies to venture abroad:Increase and test adaptability by start sending employees abroad for short period of times.Ex: IBM began sending executives to emerging markets as consultants, with the goal of investing time helping long-standing customers and other stakeholders.

An example of a company that has succeeded at creating an international culture and cultural fit:Cirque Du Soleil is an entertaining private company that started in Montral and has opened their market to all over the world, it has Canadian and international employees working on tours globally and has been doing so for more than 20 years.

Among the things that had helped Cirque Du Soleil achieve the success they currently have with cultural fit is the fact that they educate and train their workers, they promote close relationships between supervisors and employees, and have developed a culture that allows employees to have a balance between work and life, because this is hard for a company that has most of its employees on tours regularly, they hire people adaptable, and make sure there is always someone new workers can relate to (people that speak the same language, similar background, similar age, etc.)

Labour Relations

What are labour relations?Work relations that are in effect in the company and determined by employer and employee.

What are labour relations concerned with? Labour legislation Unions Collective bargaining power Government Contract administration

Mostly the government of a nation dictates labour relations. Its main purpose is to set laws (labour legistlation) and make sure everyone is treated fairly within a company and a nation. Unions are organizations of workers trying to get improvements in wages, working conditions and benefits through collective bargaining. Contract administration is making sure that both employer and employees are following laws and rules, and that contracts are being complied with.

What does this all mean when doing business internationally?When entering new markets abroad companies need to be aware of possible differences and problems they might face. These are for example differences in legal systems (laws), cultural differences (how to handle things, what is valued etc.) and differences in levels of economic development. Companies come across plenty of decisions to make, for example whether to transfer current workers to the new country and help them settle down to a new culture, or hire local people and train them to fit companys culture.

Countries differ in labour laws. Differences in legislation may be either an advantage or a disadvantage for a company. Many companies are manufacturing for example in Asia. Why? Because their labour laws are different. Lets compare Vietnam and Denmarks labour laws.

Example:A Danish outdoor sports garments producing company Spectre is manufacturing its products (clothes) in Vietnam. There is surely a lot of reasons for making that strategic decision but lets bring up a few facts we found interesting in comparing these two countries.

1) Minimum wage Denmark: 20$/hour Vietnam: 45$/month2) Maximum working hours per week Denmark: 37,5 hours Vietnam: 48 hours3) Maternity leave Denmark: 52 weeks, paid leave Vietnam: 26 weeks, unpaid leave4) Paid annual leave (minimum) Denmark: 25 days Vietnam: 12 days

Conclusion:In this case Spectre was aware of differences in labour laws between these two countries and decided to move their manufacturing to Vietnam. They hired local employees working in manufactures in Vietnam because if they transferred Danish employees to Vietnam they wouldve had to follow Danish labour laws with these people.

Cultural differences:While labour relations are concerned with labour legistlation its also important that companies understand differences in cultural view. For example when hiring a new employee employer needs to be aware of both legal and cultural requirements. However, the same thing stands also the other way; when applying a job in a new country one needs to have a sufficient awareness of these kinds of demands and expectations.

Example:Job interview of an Indian man applying for a job in USA.https://www.youtube.com/watch?v=LuZV9kkzscg

Strategy- What does Cultural Fit and labour relations mean to the firm, How will the company enter the new market regarding HR?4 approaches for international Human Resources strategies Ethnocentric Approach- Higher level positions are filled by individuals from the home country of the company. Often used for entering the international market Home standards are carried over to new market High cost Low morale

Examples: Toyota, Samsung Samsung began with senior management being South Korean. Up until 1999, 90% of these managers were graduates of Soul National University (online textbook source)

Polycentric Approach- Employees throughout the firm are hired from local area Local Knowledge Cultural understanding Lower costs Higher morale amongst employeesExample: John Deere John Deere has developed low cost tractors and equipment that fits with the Indian culture only because they hired locals to bring knowledge of Indian culture to the company.

Geocentric Approach- Firm will hire the most qualified individual, regardless of cultural background. New/different perceptive for company Most qualified individuals are employed Country must have low restrictions on foreign workers Example: Colgate Palmolive More than half of the company is not from the United States. Senior officials in the company speak two or more languages.

Regiocentric Approach- Company is divided by geographic regions. Firm will hire upper levels of management from the same region as host country. Lower costs Cultural understanding/fit Good approach if there is a lack of employees in host countryExample: