International Human Resource Management

Introduction

The current business climate has become so complicated and competitive that an organization’s survival is dependent on how competitively it is able to align its internal structures, as well as strategies to deal with macroeconomic pressures. Following saturation in home markets, many organizations prefer to diversify their trade to international markets where they may find opportunities for expanded market. However, these multinational enterprises eventually realize that dealing with domestic market pressures may be quite a small issue compared to the challenge they face of management of cultural diversity.

Due to the current trend of globalization, multinational enterprises are investing heavily on human resource management and specifically diversity management in order to gain competitive edge in the international market. In most occasions, MNEs find a mixture of both expatriates and inpatriates as a viable tool of creating balance in the management of an organization. According to Dowling, Festing and Engle (2008, p. 97) inpatriates play a key role as agents of socialization, networking, boundary spanning and language difference bridging; while lack of competency in diversity management limits the organization’s opportunities to gain competitive advantage. In addition, operating business in an environment that has different employees cultures may affect the organization’s performance and reputation either positively or negatively. Employees cultures differ depending on the norms, behaviors, values, perceptions, lifestyles and consumption patterns and therefore an organization that intends to venture into a market that contains diverse cultures has to do a thorough background in order to operate effectively. This is from the realization that culture is quite influential in organization’s functions and therefore needs to be prioritized as a HR concern (France, 2009, cited in HRM Singapore, 2009).

Asian market has, in the last few years been considered as the most viable and lucrative for business expansion. This can be empirically proved by the rapid growth experienced in the Far East Asian countries, including China, Singapore, Hong Kong, Thailand and Korea among others, popularly known as the emerging markets; where various western MNEs like General Motors, Microsoft and the rest have pitched tent to take advantage of the available opportunities such as cheap labor, abundant raw materials, unexploited market environment and so on. However, Asian culture is always one of the major handles that the MNEs from non-Asian countries wishing to invest in Asia and particularly Singapore have to contend with. This paper will discuss the Asian (Singapore) cultural and diversity issues that these MNEs will encounter, their influence on performance and how to deal with them.

Culture and Diversity issues in Singapore

Multinational enterprise may be described as large corporations operating across various national economies, with a parent company based in the country of origin controlling the assets of other organizations based in countries other than the home country. In addition, these companies establish permanent operation bases in the host country where they have to adopt the regulatory framework of the host as well as employ some of the local community. Since the company has to send expatriates for the benefit of company’s continuity in addition to employing the local community, proper leadership is important to enhance coordination and harmony in the workforce that is largely diversified (Woerkom and Reuver, 2009). In addition, the company has to understand the salient norms and traditions of the host country in order to avoid cases of conflict, putting in mind that what may be legal or accepted in home country may not be so in the target market (Janice, 1997).

Diversity is important measure of organization performance in the global market especially when there are rapid changes in economic conditions (Schein, 1996, p. 215). Diversity may take several forms; it may include gender issues, racial issues, age or religion. Therefore, it is important that a company understands how the host country treats each of these issues. In Singapore for example, although in legal terms there is no discrimination of women, family hierarchy is highly regarded with the man taking the sole responsibility to take care of the family and women always being regarded as inferior to their make counterparts.

Due to the differences in culture, the company will need to incorporate the culture of the local people into its corporate culture, noting that adopting the practices of the host country is important as long they are morally acceptable (Berger and Huntington, 2002). This has been emphasized by Briscoe and Schuler (2004, p. 178) with the claim that a MNE investing in foreign country should embrace cultural diversity while at the same upholding the international human rights principles which are universally accepted; adopt the host practices as long as they permit successful conduct of business and they dot violate fundamental human rights. However, culture is always learnt and the company should enhance internal structures that influence interactions such as flat organization structure and horizontal communication. Moreover, it’s the responsibility of HR to en sure that appropriate culture which is acceptable by all the employees is incorporated in the corporate business strategy to ensure the success of business in the host country culture.

Hierarchy and respect are issues that the MNE should be aware of. In Singapore, hierarchy or organization positional relationship is important and demands respect. According to HRM Singapore (2009), bosses in Singapore are known to groom employees, while the communication patter has to be maintained in a vertical pattern. This scenario can be witnessed in the relationship between the parent and children employer and employees and so on. Not only in workplace that hierarchy is observed, but also in social circles where the elderly are given preference and respect in all matters, in addition to the legislation that gives the young the obligation to cater for the elderly irrespective of their other commitment. In addition, although Singaporeans are authoritative in business, they avoid confrontations meaning that a show of anger or frustration will lead to losing face or status and respect which are highly regarded in Singapore. Saving face is one of the most prized assets by Singaporeans in their pursuit of harmonious relationships and therefore should be respected at all times.

However, the current rapid liberalization has seen the Singaporean culture changing to accommodate foreign investment especially through attracting and assimilating foreign investors in permanent residency or citizenship to boost talent in the country whose population is a bit low (How, 2007, p. 51).

In the last few years and especially following the September 11 bomb blast in the US, there has been a cloud of suspicion and negative diversity perceptions especially in terms of race and more specifically related to culture. However, government has intervened and enacted legislations that tend to create diversity harmony both in social circles, schools and workplaces (Shuen, N.d). How business is carried out in Singapore is also different; While in other cultures business cards will be exchanged with the sole purpose of establishing business contact, in Singapore, business cards are treated with a lot of sensitivity, for example, it must be after initial introductions, must be handed with both hands to show respect, and color is of essence with gold being preferred. In addition, business etiquette is important in Singapore and therefore the company should know how to interact, for example a protocol should be followed in all matters; greetings must show respect of age and position, while when greeting non-muslim women, let the woman be the first to extend hand although Indian Singaporean require the nodding of head only when greeting a person of opposite sex.

Singapore is a multilingual country, with major languages being Mandarin, Tamil, Malay and English. A MNE intending in setting base in Singapore should therefore be aware of these languages because each one of them is important in carrying out business. These languages have been borne from the immigrants from the neighboring countries such as China, India, Thailand and Malaysia, while English was introduced by European colonizers. Due to mixture of these different cultures and languages, Singapore has established its own language called ‘Singlish’ coined from mixture of local languages and English. Therefore, since this language is mostly used in carrying out business in Singapore, the MNEs should be aware and capable adopting it in its ranks in order to effectively carry out business. This can be through the use of local people in the organization who will come in handy in translating and communicating with potential local market.

Family in Singapore is very important and should be respected as the facet for creating harmony in the community. Individual preferences come second and it is the responsibility of the man to take care of the family which is normally described in terms blood relations and close friends.

Singapore is a multi-denominational country and the MNE intending to operate there has to embrace the understanding of the various religions in the country. The main religions in the country are Christianity, Islam, Hindu and Buddhism. Each of these religions is respected and has a key role it plays in the business circle. Knowledge of religion diversity will enhance the company to make corporate strategies that will address the needs of all the religious groups. In addition, it will allow the company to establish the best location depending on the products it wishes to establish, for instance, pork should not be established in the region that is predominantly inhabited by Muslims and so on. Some tribes such as Chinese regard religion as the work of women while men’s responsibility is to conduct public rituals (Lai, 2008).

Race is also a diversity issue that MNEs are likely to encounter when they set their operations in Singapore. Although there are different races in Singapore including Chinese, Indians and so on, there will always be differences of race that has to be addressed. However, Singapore considers the importance of oneness in mankind and that there is no one race that is dominant than the other as far as moral foundation of the society is concerned. Therefore, changing the perception of people about oneness rather than race will help eradicate racial discrimination (Shuen, n.d)

Gender issues are al so important influences on investment in Singapore. Like any other diversity issue, equal opportunity for all regardless of gender is essential for business performance. For many years, Singapore women have been treated as inferior to men although the current scenario has witnessed many women joining the workforce. The MNEs should be aware of how to treat gender issue in Singapore noting that although equal opportunity may mean treating both men and women with fairness, it doe not necessarily mean treating them the same.

Age diversity is also important especially considering that in Singapore the elderly are treated like ‘kings’. That is, as explained earlier in hierarchy, respect is always upheld based on the age of the person. While in many countries the retirement age is 55 years or 60 years, in Singapore, the retirement age is 62 years and therefore the company should be aware of this (Gross and Weitraub, 2005).

Conclusion

Diversity is an important aspect in enhancement of organizational performance in the global market. Having a diversified workforce not only enhances communication and general performance of the organization, but also aids the organization in gaining competitive advantage. Expatriates working the host country need to absorb some cultural practices as well as upholding organization’s culture in order to be effective. It is important according to Gomez-Meja and Palich (1997) to understand cultural diversity in order to enhance efficiency in activity sharing and production synergy as well as create an atmosphere to exploit management expertise and technical know-how.

Singapore is a country rich in diversity following the attraction and intermarriages with immigrants coming from countries like china, Indonesia, India, Thailand and western cultures. This has made the country one of the rapidly expanding business hubs in the world and is the leading business center in Asia-pacific despite its small population of about 4.5 million people (Schulte, 2009). The country has also embrace a new culture of assimilating foreigners through intermarriages, naturalization and permanent residency. According to How(2007), the country has endeavored to attract foreigners especially those with talent by giving them incentives to change their citizenship and become Singaporean in order to contribute to the economic development of the country. Multinational enterprises should therefore be aware of this trend and make viable strategies that will enhance the continuity and perpetual good performance of the organization.

The country has also been on alert of consequences of diversity mismanagement and has adopted the international labor laws that call for acceptable practices that are compatible with fundamental human rights and equal opportunity for all regardless of gender, race, age, religion or culture. This has seen many multinational companies establishing their business centers in the country thus making it a viable point of interest for prospective investors.

Any MNE intending to invest in a foreign country and specifically Singapore should develop ethical policies that will need to be applied by all employees in the host country. These may include obeying the legal/cultural structures in the country as acceptable facets for carrying out business; abide by the international labor laws of equality (although in Singapore, the issue of hierarchy should be respected); proper hiring of both the local communities and the expatriates; reasonable and accepted treatment of gender since this may be a hot issue with the local culture; and lastly but not the least, avoid any practice or action that will bring about ‘lose of face’ in the country since this is one of the most important and respected social assets of the Singaporeans.

Conducting business in Singapore may encounter various issues that will need to be addressed especially considering that Singaporeans handle their business differently from other countries outside the Asian region. For instance, business etiquette should be observed strictly especially considering that business in Singapore is extremely formal with a protocol that must be observed. In addition, taking care of group importance is crucial as is the issue of issue of not questioning authority (questioning authority is a taboo).

Recommendations

Since the world has turned to a global village and extensive globalization is taking place, investing in foreign countries and especially Asia (regarded as the hub for contemporary business) is inevitable as long as the organization wants to gain competitive advantage in the global market. In so doing, the organizations will have to make specific strategies that will enhance effective operations in Singapore. First, the organizations will have to balance between expatriates and inpatriates in their management and employee database. According to Dowling, Festing and Engle (2008, p. 97) inpatriates are importation in that they have the clear knowledge of the local market and are expected to be the kingpins in the market through sharing local cultural practices with corporate members as well as transmitting the corporate culture and behavior to the target market.

An organization’s effectiveness in the market will depend on how well it is able to measure the level of cultural diffusion it has. This can be done conducting an employee culture index that will indicate whether they are satisfied with organization, whether they would recommend other family members to the company or whether they are planning to be long term employees of the company.

Incorporating diversity management programs is important in order to provide employees with salient skills about expected diversity issues and how to handle them effectively.

Reference

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