International Human Resource Management

Unit-4

Equal Opportunity and Diversity Management in Global Context

Emerging from the USA during the late 1980s, the 'diversity approach' began to be discussed as a means of providing
both a business and social-justice incentive to drive equality within organizations. Unlike equal opportunities
approaches, which aim for workplaces where an individual's sex and race is of no greater significance than the colour
of their eyes in determining the treatment they receive, the core idea behind managing diversity seems to be to
encourage organizations to recognize differences.

Managing diversity is generally seen as "proactively capitalizing on the different skills, qualities and viewpoints that a
diverse workforce has to offer". Managing Diversity is about the realization of the potential of all employees where
certain group based equal opportunities need to be seriously questioned, in particular affirmative action and targets.
Diversity approaches that encourage managers to ignore the realities of inequality and discrimination will mean that
the status quo is maintained.

Differences exist between people, and in line with the diversity approach are seen as important issues for management
to respond to. However, these differences are not seen as distributed thoroughly as such, while the intention of such an
approach is an environment in which everybody feels valued, social group equality is not being given any specific
significance as an objective of organizational policies. Instead diversity issues are said to "exceed beyond obvious
physical differences and include communication styles, problem solving, professional expertise, management level,
training and education, and work principles". Managing diversity policies attempt to discover individual needs and
desires which would help people work more effectively and respond through, for example, career management or
benefit schemes.

Globalization has affected the area of EEO in terms of formal applicability of one country's EEO laws to persons
working in another country and in terms of expectations about the extent to which equal employment opportunity
should be a societal or organizational norm.

In some instances, discrimination is prohibited against the citizens of the native country but explicitly permitted when
it comes to immigrants, especially illegal immigrants. There is a currently debate in the US as to what rights
immigrants- both legal and illegal-should have in terms of EEO. The right to work in a foreign country is subject to
that country’s immigration laws, which vary widely from country to country.

Theories of Employment Discrimination

Since the enactment of Title VII of the Civil Rights Act, four theories of employment discrimination have emerged
under U.S. law: disparate treatment, disparate impact, harassment and retaliation.

Disparate treatment

Disparate treatment discrimination occurs when an employer intentionally takes an employee's protected status into
consideration when taking an adverse employment action, such as a termination or layoff decision. An example of
intentional discrimination is an employer that learns of an employee's pregnancy and, based at least in part on that
knowledge, selects the pregnant employee for layoff rather than a less-qualified employee who is not pregnant. See
what are disparate impact and disparate treatment?

Disparate impact

Disparate impact discrimination, also known as adverse impact discrimination, occurs when an employer adopts a
policy or practice that seems neutral and nondiscriminatory on its surface but has a disproportionately negative effect
on members of a protected class. Practices that have been found to have a disparate impact on protected groups
include:

Minimum height requirements: These have been found to disproportionately affect women, Hispanics and Asians.
Physical agility tests: These can have a disparate impact on women.

Clean-shaven requirements: These have been found to adversely affect African-American men who are
disproportionately affected by a skin condition that is aggravated by shaving.

In a court proceeding, once disparate impact is established, the employer must demonstrate that the challenged
requirement is job related for the position in question and consistent with business necessity. If the employee can point
to a less discriminatory way to satisfy the business needs, the employer may be obligated to adopt that alternative. See
avoiding adverse impact in employment decisions.

Harassment

Harassment is a form of disparate treatment (i.e., intentional) discrimination. The theory has its roots in sexual
harassment cases under Title VII, but courts have applied the same reasoning to harassment on the basis of other
protected characteristics, such as race or religion. Sexual harassment can occur in two forms: by the opposite sex or by
the same sex.

Quid pro quo harassment

This type of harassment involves unwelcome sexual advances, requests for sexual favors, or other verbal or physical
conduct of a sexual nature when submission to such conduct is made either explicitly or implicitly a term or condition
of employment, or when submission to or rejection of such conduct by an employee is used as the basis for
employment decisions, including termination.

Hostile environment harassment

A hostile work environment exists when conduct has the purpose or effect of unreasonably interfering with an
individual's work performance or creating an intimidating, hostile or offensive work environment. For a hostile
environment to be unlawful, it must be so pervasive and severe that it effectively alters the terms of employment. The
environment must be such that a reasonable person would find it hostile or abusive.

Retaliation

Most U.S. laws that prohibit employment discrimination also prohibit retaliation against an employee because the
employee has exercised rights under the statute at issue.

For example, Title VII of the Civil Rights Act makes it illegal for an employer to discriminate against an employee
because that employee opposed any discriminatory practice; made a charge of discrimination; or testified, assisted or
participated in any manner in an investigation, proceeding or hearing. The individual employee who claims to be the
victim of discrimination can also claim to be the victim of retaliation for complaining about it.

Lawsuits based on retaliation can be even more difficult for employers to defeat than lawsuits based on direct
discrimination. Employers must exercise caution not to attempt, or appear to attempt, to "get even" when conducting
disciplinary terminations or layoffs in which the affected employees have participated in protected activities. See
Retaliation Prevention Questionnaire.

Preventing Violations and Managing Risk

Just as violations of EEO laws can be systemic, adherence to EEO requirements is most effective when systemic.
Employers can take many actions to prevent EEO violations and charges of discrimination, including:
• Adopting an organizational philosophy that treats employees as individuals entitled to respect and fair treatment, not
as commodities.

• Establishing clear written policies and practices that genuinely reflect the employer's EEO values, and then sticking
to them and creating thorough documentation of human resource decisions.

• Emphasizing the employer's EEO values, policies and procedures in new-employee on-boarding and training. See
EEO Policy Statement.

• Providing ongoing training at all levels about the employer's EEO values, policies and procedures.

• Creating an EEO conflict resolution process that is truly open-door.

• Designating and empowering a responsible individual to address EEO issues: an ethics officer, EEO officer,
affirmative action officer, diversity officer, ombudsman or director of human resources.

• Investigating employee complaints thoroughly and consistently.

In addition to the steps described above, employers also manage their EEO risk through:

• Internal dispute resolution programs, such as grievance procedures, mediation and arbitration.

• Employer practices liability insurance.

• Using releases of claims as part of a severance pay plan or ad hoc settlement of EEO claims.

• Ongoing management of EEO issues.

Enforcement

In the United States, EEO laws are enforced both by public agencies and private lawsuits.

Administrative Agencies

Federal EEO laws are generally administered by the U.S. Equal Employment Opportunity Commission (EEOC). See
EEOC Coordination of Federal Government Equal Opportunity.

Most state governments have one or more civil rights enforcement counterparts to the EEOC, referred to by the EEOC
as Fair Employment Practice Agencies. State civil rights agencies usually have concurrent jurisdiction with the EEOC
to investigate charges of discrimination under the laws administered by the EEOC, as well as exclusive jurisdiction to
administer their own laws.

Charge of discrimination

Employees or other persons who believe their rights to equal employment opportunity have been violated may file a
Charge of Discrimination with the EEOC, with the appropriate state agency or with both. A discrimination charge filed
with the EEOC is a sworn statement outlining in very general terms why the charging party believes his or her EEO
rights have been violated. The EEOC will assist the charging party in the preparation of this form based on an
interview with the charging party. The discrimination charge is often accompanied by a more detailed sworn statement,
or affidavit, especially if the charging party has legal counsel.

Agency investigation

The EEOC or state counterpart will notify the employer or other party being charged—the respondent—of the
allegations made by the charging party and request that the respondent provide a written response to the allegations
and copies of pertinent documents such as policies, performance evaluations and documentation of any disciplinary
actions. In some instances, the investigating agency will also request information about workforce demographics.

Responding to EEO Complaints

An employer's obligations in the face of an EEO complaint are to do the following:

• Conduct an investigation that is prompt, fair and thorough.

• Take appropriate remedial measures.

Conciliation efforts

Before or after the respondent submits its response to the charge of discrimination and agency request for information,
the agency typically offers to assist the parties in reaching a negotiated resolution. Sometimes the agency investigator
facilitates conciliation; sometimes the agency provides an experienced mediator and facilities for the parties to meet
and to attempt to negotiate a resolution satisfactory to both sides.

Agency determination

If the parties do not agree to a negotiated resolution, the agency will proceed to make a determination about whether it
believes there is probable cause to believe the respondent violated the charging party's EEO rights. Although the
situation under state laws may be different, a determination that discrimination either did or did not occur is
nonbinding and is probably not admissible in court proceedings.

The right to sue

The agency charged with administering the particular EEO law must be given the first opportunity to address the issue
(i.e., a charging party cannot bypass the agency and immediately file a lawsuit). At the end of the investigation and
issuance of its charge determination, the agency will notify the charging party in a right-to-sue letter that he or she may
now proceed to file a lawsuit, if desired, and will also state how much time the charging party has to do so, typically 90
days.

Private and Agency Lawsuits

Under the laws administered by the EEOC, the issuance of the right-to-sue letter starts the clock running for an
aggrieved person to file a complaint with an appropriate court of law. This process ordinarily requires hiring an
attorney on a contingent-fee basis. In certain circumstances, though, the agency will file a lawsuit on the charging
party's behalf, thereby providing the employee with expert government-paid legal counsel.

Factors in the EEOC's decision to file suit on an employee's behalf include:

• The number of employees affected (especially if a class action).

• The type of violation alleged.

• The agency's desire to flesh out unanswered questions under the law or to further the public interest in targeting
certain high-priority fields or industries.

Managing Cultural Diversity in the Workplace

Developing cultural competence results in an ability to understand, communicate with, and effectively interact with
people across cultures, and work with varying cultural beliefs and schedules. While there are myriad cultural
variations, here are some essential to the workplace:
1. Communication: Providing information accurately and promptly is critical to effective work and team
performance. This is particularly important when a project is troubled and needs immediate corrective actions.
However, people from different cultures vary in how, for example, they relate to bad news. People from some Asian
cultures are reluctant to give supervisors bad news — while those from other cultures may exaggerate it.

2. Team-Building: Some cultures — like the United States — are individualistic, and people want to go it alone.
Other cultures value cooperation within or among other teams. Team-building issues can become more problematic as
teams are comprised of people from a mix of these cultural types. Effective cross-cultural team-building is essential to
benefiting from the potential advantages of cultural diversity in the workplace.

3. Time: Cultures differ in how they view time. For example, they differ in the balance between work and family life,
and the workplace mix between work and social behavior. Other differences include the perception of overtime, or
even the exact meaning of a deadline. Different perceptions of time can cause a great misunderstanding and mishap in
the workplace, especially with scheduling and deadlines. Perceptions of time underscore the importance of cultural
diversity in the workplace, and how it can impact everyday work.

4. Schedules: Work can be impact by cultural and religious events affecting the workplace. The business world
generally runs on the western secular year, beginning with January 1 and ending with December 31. But some cultures
use wildly different calendars to determine New Years or specific holy days. For example, Eastern Orthodox
Christians celebrate Christmas on a different day from western Christians. For Muslims, Friday is a day for prayer.
Jews observe holidays ranging from Rosh Hashanah to Yom Kippur. These variations affect the workplace as people
require time off to observe their holidays.

To develop cultural competence, training should focus on the following areas:

1. Cultural Awareness is the skill to understand one's reactions to people who are different, and how our behavior
might interfere with effective working relationships. We need to learn to overcome stereotypes? We need to see people
as individuals and focus on actual behavior, rather than our preconceived and often biased notions.

2. This is the companion skill to awareness. Attitude enables people to examine their values and beliefs about cultural
differences, and understand their origins. It is important that to focus on facts, rather than judgment. Also, note that
suggesting that some people are more biased and prejudiced than others can quickly sabotage cultural training. The
goal is managing cultural diversity in the workplace, and creating effective working relationships - not to make
converts.

3. Knowledge Social science research indicates that our values and beliefs about equality may be inconsistent with
behavior. Ironically, we are often unaware of this. Knowledge about our own behavior - and how it relates to fairness
and workforce effectiveness - is an essential skill. It's also essential to be knowledgeable about other cultures, from
communication styles to holidays and religious events. The minimum objective is tolerance, which is essential for
effective teamwork. Differences are what make tolerance necessary, and tolerance is what makes differences possible.
4. Skills-The goal of training - in awareness, attitude, and knowledge - should be skills that allow organizational
leaders and employees to make cultural competence a seamless part of the workplace. The new work environment is
defined by understanding, communicating, cooperating, and providing leadership across cultures. Managing cultural
diversity in the workplace is also the challenge for organizations that want to profit from a competitive advantage in
the 21st century economy.

Structure of Global organization

1. Expo Document against acceptance Department: Exports are often looked after by a company’s marketing
or sales department in the initial stages when the volume of exports sales is how. However, with increase in
exports turnover, an independent exports department is often set up and separated from domestic marketing as
shown in figure given below:
Exports activities are controlled by a company's home-based office through a designated head of export
department, i.e. Vice President, Director, or Manager (Exports). The role of the HR department is primarily
confined to planning and recruiting staff for exports, training and development, and compensation.

Sometimes, some HR activities, such as recruiting foreign sales or agency personnel are carried out by the exports
or marketing department with or without consultation with the HR department.

#2 International Division Structure:

As the foreign operations of a company grow, businesses often realize the overseas growth opportunities and an
independent international division is created which handles all of a company's international operations (Fig. 17.3).
The head of international division, who directly reports to the chief executive officer, coordinates and monitors all
foreign activities.

The in-charge of subsidiaries reports to the head of the international division. Some parallel but less formal
reporting also takes place directly to various functional heads at the corporate headquarters.

The corporate human resource department coordinates and implements staffing, expatriate management, and
training and development at the corporate level for international assignments. Further, it also interacts with the HR
divisions of individual subsidiaries.

The international structure ensures the attention of the top management towards developing a holistic and unified
approach to international operations. Such a structure facilitates cross-product and cross-geographic co-ordination,
and reduces resource duplication.
Although an international structure provides much greater autonomy in decision-making, it is often used during the
early stages of internationalization with relatively low ratio of foreign to domestic sales, and limited foreign
product and geographic diversity.

#3 Global Organizational Structures:

Rise in a company's overseas operations necessitates integration of its activities across the world and building up a
worldwide organizational structure.

While conceptualizing organizational structure, the internationalizing firm often has to resolve the following
conflicting issues:

1. Extent or type of control exerted by the parent company headquarters over subsidiaries

2. Extent of autonomy in making key decisions to be provided by the parent company headquarters to subsidiaries
(centralization vs. decentralization)

It leads to re-organization and amalgamation of hitherto fragmented organizational interests into a globally
integrated organizational structure which may either be based on functional, geographic or product divisions.
Depending upon the firm strategy and demand of the external business environment, it may further be graduated to
a global matrix or trans-national network structure.

Global Functional Division Structure

It aims to focus the attention of key functions of a firm, as shown in figure 17.4 wherein each functional
department or division is responsible for its activities around the world. For instance, the operations department
controls and monitors all production and operational activities. Similarly, marketing, finance and human resource
division co-ordinate and control their respective activities across the world.

Such an organizational structure takes advantage of the expertise of each functional division and facilitates
centralized control. MNEs with narrow and integrated product lines, such as Caterpillar, usually adopt the
functional organizational structure.

Such organizational structures were also adopted by automobile MNEs but have now been replaced by geographic
and product structures during recent years due to their global expansion.

The Major Advantages of global functional division structure include:

1. Greater emphasis on functional expertise

2. Relatively lean managerial staff

3. High level of centralized control

4. Higher international orientation of all functional managers

The Disadvantages of such divisional structure include:

1. Difficulty in cross-functional coordination

2. Challenge in managing multiple product lines due to separation of operations and marketing in different
departments

3. Since only the chief executive officer is responsible for profits, such a structure is favored only when centralized
coordination and control of various activities is required.

Global product structure:

Under global product structure, the corporate product division, as depicted in Fig. 17.5, is given worldwide
responsibility for the product growth.

The heads of the product divisions do receive internal functional support associated with the product from all the
divisions such as operations, finance, marketing and human resource. They also enjoy considerable autonomy with
authority to take important decisions and operate as profit centres.

The global product structure is effective in managing diversified product lines.

Such a structure is extremely effective in carrying out product modifications so as to meet rapidly changing
customer needs in diverse markets. It enables close coordination between the technological and marketing aspects
of various markets in view of the differences in product life cycles in these markets, for instance, in case of
consumer electronics, such as TV, music players, etc.

However, creating exclusive product divisions tends to replicate various functional activities and multiplicity of
staff. Besides, little attention is paid to worldwide market demand and strategy. Lack of cooperation among
various product lines may also result into sales loss. Product managers often pursue currently attractive markets
neglecting those with better long-term potential.

Global Geographic Structure:

Under the global geographic structure, a firm's global operations are organized on the basis of geographic regions,
as depicted in Fig. 17.6. It is generally used by companies with mature businesses and narrow product lines. It
allows the independent heads of various geographical subsidiaries to focus on the local market requirements,
monitor environmental changes, and respond quickly and effectively.

The corporate headquarter is responsible for transferring excess resources from one country to another, as and
when required. The corporate human resource division also coordinates and provides synergy to achieve
company's overall strategic goals between various subsidiaries based in different countries.

Such structure is effective when the product lines are not too diverse and resources can be shared. Under such
organizational structure, subsidiaries in each country are deeply embedded with nationalistic biases that prohibit
them from cooperating among each other.

Global Matrix Structure:

It is an integrated organizational structure, which super-imposes on each other more than one dimension. The
global matrix structure might consist of product divisions intersecting with various geographical areas or
functional divisions (Fig. 17.7). Unlike functional, geographical, or product division structures, the matrix
structure shares joint control over firm's various functional activities.
Such an integrated organizational structure facilitates greater interaction and flow of information throughout the
organization. Since the matrix structure has an in-built concept of interaction between intersecting perspectives, it
tends to balance the MNE's prospective, taking cross-functional aspects into consideration.

It facilitates ease of technology transfer to foreign operations and of new products to different markets leading to
higher economies of scale and better foreign sales performance. Matrix structure is used successfully by a large
number of MNEs, such as Royal Dutch/Shell, Dow Chemical, etc.

In an effort to bring together divergent perspectives within the organization, the matrix structure may also lead to
conflicting situations. It inhibits a firm's ability to respond quickly to environmental changes in case an effective
conflict resolution mechanism is not in place.

Since the structure requires most managers to report to two or multiple bosses, Fayol's basic principle of unity of
command is violated and conflicting directives from multiple authorities may compel employees to compromise
with sub-optimal alternatives so as to avoid conflict which may not be the most appropriate strategy for an
organization as a whole.

Transnational Network Structure:

Such a globally integrated structure represents the ultimate form of an earth-spanning organization, which
eliminates the meaning of two or three matrix dimensions. It encompasses elements of function, product, and
geographic designs while relying upon a network arrangement to link worldwide subsidiaries (Fig. 17.8).
This form of organization is not defined by its formal structure but by how its processes are linked with each other,
which may be characterized by an overall integrated system of various inter-related sub-systems.

The trans-national network structure is designed around 'nodes', which are the units responsible for coordinating
with product, functional and geographic aspects of an MNE. Thus, trans-national network structures build-up
multidimensional organizations which are fully networked.

The conceptual framework of a trans-national network structure primarily consists of three components:

Disperse sub-units:

These are subsidiaries located anywhere in the world where they can benefit the organization either to take
advantage of low-factor costs or provide information on new technologies or market trends.

Specialized operations:

These are the activities carried out by sub-units focusing upon particular product lines, research areas, and
marketing areas design to tap specialized expertise or other resources in the company's worldwide subsidiaries.

Inter-dependent relationships: It is used to share information and resources throughout the dispersed and
specialized subsidiaries. Organizational structure of N.V. Philips which operates in more than 50 countries with
diverse range of product lines provides a good illustration of a trans-national network structure.

#4. Evolution of Global Organizational Structure

Organizational structure often exhibits evolutionary patterns, as shown in figure 17.9, depending upon their
strategic globalization. The historical evolution of organizational patterns indicate in the early phase of
internationalization most firms separate their export departments from domestic marketing or have separate
international divisions.
Companies with emphasis on global business strategies move towards global product structure whereas those with
emphasis on location base strategies move towards global geographic structures.

Subsequently, a large number of companies graduate to matrix or trans-national network structure due to dual
demands of local adaptations pressures and globalization. In practice, most companies hardly adopt either pure
matrix or trans-national structures; rather they opt for hybrid structures incorporating both.

Emerging Trends in Employee Relations and Employee Involvement

• Centralization of the ER function: ER has traditionally been organized using one of the three models —
decentralized, centralized, and mixed. Centralized design refers to an ER team that is responsible for managing
employee relations issues and conducting investigations across the organization. The team does not have to be
geographically centralized. The mixed ER model relies on a centralized team for managing some or most of the
employee relations cases and investigations with field representatives (HR professionals) to manage some
employee relations issues. In the decentralized model, employee relations issues are managed within specific
functions or verticals by ER and HR professionals. A recent survey by HR Acuity suggests a shift towards the
centralization of the ER function. The survey report noted a year over year decline in the number of organizations
using a decentralized approach for employee relations. Industries like pharmaceuticals and technology were found
to be heavily dependent on the centralized model, while other industries like finance, insurance, and healthcare
took the mixed approach to ER.

• An increasing focus on metrics and analytics: Like other HR functions, ER is also becoming more data-driven
and outcome driven. Organizations are increasingly focusing on cost, root cause, and tracking metrics to drive
continuous improvement. By analyzing key trends, ER teams can also benefit from significant cost savings and
determine the actual cost of grievances and litigation. In 2019, the ER function will increasingly rely on
prescriptive and predictive analytics to predict, mitigate and even prevent ER issues from blowing up.

• Workplace safety will be in the spotlight: 2017 and 2018 brought to light numerous new allegations of sexual
harassment in the workplace. The #MeToo movement gathered momentum and raised uncomfortable questions
about ER practices in the organizations affected. ER professionals could expect more employees to open up and
report sexual misconduct and be ready to act in anticipating employees' public allegations. Building awareness of
anti-harassment laws isn't going to be enough ER professionals will need to proactively create an environment in
which all employees feel safe.

Trends in Employee Relations

For the last 25 years, lots of changes have been observed in the arena of employee relationship in the UK. Almost
all the norms which were considered to be major in the industries of England have been done away with. This has
occurred as the kind of work people do has changed, also the kind of workplace that the people are in has changed
over the years. The changes in structure have also brought about a change in the culture. The attitude of employers
towards their employees and vice versa has changed tremendously over the years. On course of this book, you will
come across lots of changes that have affected the different areas of the workplace. All areas of HRM activities
have changed henceforth. However the most astounding of changes have occurred in employee relations. You can
say that the different changes have progressed at different speeds in the various fields. You will find lots of
workplaces in the public sectors, where even today the traditional models of employee relations are followed. The
governments have come and gone trying to undermine these things. Hence as a result of this, in the present times,
there exists, a lot of variety in approaches in different sectors of industry than it was in the past.

Trade union decline

The most striking of changes that has been seen, is the lessening in the number of people who join the trade
unions. Even if these people join, they do not take part in the activities of these unions. In the United Kingdom, the
number of memberships had reached its pinnacle in the year 1979. It was seen that more than 13 million people,
which is roughly 58% of all employees had opted for being member of the unions for trade. In the years that
follow, there has been a decrease in the numbers continuously for every year. The older members of the unions
have retired, and new people have not substituted them. In the year 2002, the membership was seen to be standing
at just 7.3 million. In the most recent times, there has been some decrease in the deterioration of numbers. Some
unions have also claimed that they have seen some increase in membership. This has happened as more number of
people has become a part of the workforce. However the density of the trade union has kept decreasing for the past
two and half decades now.

Window on practice

The trade unions mainly face problems in getting members from places which are also called dispersed sectors.
Here actually the different employees lay scattered in small places of work throughout the entire country. The
people are seen working in quite small teams which can even include less than six people. Hence the traditional
approach of unions which included communicating from a higher authority to people such as stewards from shops
is not quite practical. Hence different new methods and technologies are required to be used such as SMSs sent
from phones and alerting these people.

In spite of different difficulties, the big unions have enjoyed some successes over the years. This has been done by
setting up of special sectors for people who works in dispersed environments. The IRS will provide you with lots
of good examples regarding this matter. The union of GMB has actually started looking for professional sports
person as well as drivers and sex workers. The union of transports as well as workers in general have also set up
unions and enrolled more than 2000 people working in small nurseries. You can say that the most famous success
story was seen in the case of clergy and church workers of Amicus. This union has got 2500 members for now and
has also succeeded in ensuring that the right of the clergyman would not be dismissed off in any manner.

Collective bargaining and Industrial Action

One of the major effects which was felt after the decline in number of members in the union, was a continued
decrease in the number of people whose terms and conditions for a particular job was set according to collective
bargaining. In this particular segment too lots of changes have occurred. In the present times, it has been observed
that people have moved on from a position where many members worked in companies having proper trade unions
to places where most people were not working in them anymore. In the year 1970, it was seen that more than 80%
of the people belonging to the general workforce in the UK, belonged to jobs determined by collective agreements.

Convergence and Divergence in Personal Management in Developed and Developing Economics

With the rise in globalization, human resource managers are faced with decisions on the theoretical approach to
managing human resources. As Festing (2012) observes, human resources management is a strategic function
whose design and implementation has the capacity for yielding a competitive advantage for the business
organization. It is at the centre of controlling operation costs by maximizing on productivity while also promoting
agility by motivating employees and exploiting their intelligence to boost overall organizational intelligence to
enhance competitiveness in the increasingly competitive globalised world. Human resource management is more
complex at the international stage where national cultures and laws may make it necessary to modify operational
approaches to promote productivity. The choices to be made are on whether to use approaches such as
convergence, divergence or a hybrid system. The convergence theory focuses on establishing best practices
applicable across the board while the divergence theory focuses on establishing management systems that conform
to the specific circumstances of each country. The choice on which of the approaches to HRM is determined by the
goals as well as the circumstances of the organization.

Convergence

The convergence theory in HRM can also be referred to as the Universalist theory which is founded on the belief
that certain best practices can yield excellent fruits if applied across organizations in different countries. This
theory was most dominant in the 1950s and 1960s in the developed world (Europe and USA) with the thinking
being that universal application of good management practices was an important factor in making societies to be
more alike across national boundaries. Proponents of this theory advanced it in relation to an imminent
acceleration in globalization where it was believed that as people continued to interact with each other more
frequently across national and cultural divide, there would emerge a global culture based on certain best practices
in business management and HRM. Even though this theoretical approach has been faulted for failing to recognize
enduring cultural differences, its proponents have sought to narrow down its application to business practices
while holding that managers across the world are more likely to have similar viewpoints and attitudes. This
justifies the convergence of management approaches. In other words, it is natural that management practices will
converge around certain established best practices.

According to Rowley (1998), the development of best practices is an evolution process where different practices
are in place and results of each dimension is weighed before the most effective ones are picked. The free flow of
information across national boundaries is among the factors that are expected to lead to the generation of best
practices across different countries as experiments with different systems are weighed against their outcomes and
decisions made regarding their suitability. This is the approach that informs this Universalist view. The
convergence theory has the same approach as the best-practice approach in HRM which is contrasted against the
best-fit approach. The former advocates for the application of best practices that have been established in
managing human resources as a way of guaranteeing good results while the latter focuses on generating
approaches that best complement the organizational strategies and their external circumstances. Despite the
opposition to the Universalist approach, observations are that it has contributed to the development of certain best
practices in HRM across the world.

One of the dominant trends in HRM practices that can be categorized as being consistent with the convergence
theory is the spread in the use of information technology in HRM. Practices such as recruitment are increasingly
making use of information technology allowing organizations to procure talent internationally. Another trend has
been the use of scientific means of interviewing and selecting staff. The practice of companies using scientifically
designed aptitude tests to determine the IQ and personality of their prospective employees has been very high and
was started in the USA before spreading to Europe and to the rest of the world. This investment in recruitment is
crucial for organizations which view employees as their most important sources of competitive advantage. The
application of the Universalist view can also be observed in the approach to employee motivation applied across
the world where dominant theories tend to be embraced across the world. For instance, reward schemes that
recognize individual contribution are being adopted across the world; even in countries that are known to be
strongly collectivist. China has been one of the latest beneficiaries of the convergence approaches as
multinationals applying their best practice in HRM have been able to inspire a change in operation approaches
among Chinese firms. This made it possible for the local firms to take measures to encourage productivity to the
level that the labor productivity in China as a whole has been on a rapid rise. This has made it easy for unit cost of
operations in China to be low despite the rising wage levels in the country.

The main driving force for convergence is the need for excellence and superior economic output. This drives
managers to settle for management approaches that have been proven to be effective in the past as it also helps in
minimizing risk. The other driver of convergence is cultural ethno-centricizm among managers who may believe
that their home practices are best and superior. This leads them to the conclusion that it is only their systems that
can work best. The other driving factor could be the growth of international organizations such as regional and
international labor organizations which push organizations towards a common approach to remuneration and
provision of good working conditions. The standards pushed for are often similar albeit with some variations
which are likely to disappear with time leading to complete convergence in such HRM practices. The main
advantage of this approach to HRM is that it creates room for the improvement of management practices across
national boundaries. However, it can have negative results is there is a conflict between culture and the
management practices embraced unlike the divergent approach that recognizes differences in culture.

Divergence

Divergence theory emphasizes the need to adopt different management approaches depending on the
circumstances and the goals of the organization. It can be explained using two theories: the cultural theory and the
institutional theory. The two theories also represent the driving factors behind this theory. The divergence theorists
in HRM practice hold that there is no ideal approach to management for all circumstances and it is therefore
important to embrace agility and modify systems to suit different circumstances in order to yield the desired
results. This is consistent with the contingency theory of management. In its pure form, it is not common among
organizations globally. However, rationale for its application is evaluated as below.

Proponents of the divergence theory hold that even though the level of human interactions across cultures has been
on the rise, cultural differences have continued to be significantly different. As a matter of fact, many of the less
dominant cultures have been radicalized in order to fight what societies in the developing world see as an attempt
to erode their cultural values in favor of entrenching a Western-dominated global culture. There is a direct
connection between cultural values and the ideal HRM practices and this makes it necessary to evaluate the
national cultures and how they are likely to affect organizational HRM systems. For instance, the choice of
management style is dependent on factors such as the level of power distance in the society while the approach to
reward systems is strongly influenced by whether a national culture is individualist or collectivist. Hofstede
provides dimensions of national cultures where are divided into 5 elements namely power distance, masculinity
index, individualism/collectivism, uncertainty avoidance, and long term orientation. This brings to the fore the
question of culture distance and its influence on HRM practices. The culture gap is the difference between cultures
in different countries and it plays a role in determining whether it would be necessary to modify management
practices to suit a new culture. Where the culture distance is low, the modification may not be necessary.

To understand the influence of culture on HRM practices, a comparison is made between the UK and the Chinese
culture as shown below:

The difference in power distance is high with the index for China being higher than UK. This implies that in
China, hierarchical structures and authoritative leadership approaches can be applied with relative effectiveness. It
also implies that employees may not need to be empowered much in decision making as they would be
comfortable with receiving explicit directions from their seniors (Pudelko, 2005). There is also a high cultural gap
on the individuality index element. The Chinese national culture is heavily collectivist while that of the UK is
heavily individualist. This cultural dimension is very relevant to determining how work is organized and how
employees are rewarded. In the individualized cultures, reward systems are expected to be based on the individual
and based on teams for the collectivist state. The demonstration on the cultural differences between the UK and
China as demonstrated above can be used to understand the viewpoints of the divergence theorists who opine that
it may be counterproductive to transfer HRM practices across countries just because they have been known to
work in a different cultural setting.

Despite the need to respect cultures, analysts warn against overreliance on the traditional cultural elements of a
country as a pointer for what cultural perspectives are held. Culture is dynamic and in many cases, ideas that
would ordinarily not be allowed become more acceptable with time. A good example of cultural dynamism can be
observed in the emergence of an urban culture in many developing countries such as China. The youthful
population in most urban centres around the world tends to conform to certain trends around the world that make
revaluation of cultural values necessary on a regular basis. Research indicates that even in societies that have been
found to be heavily collectivist in nature in the past, there has been a growing trend towards individualist
viewpoints as the culture of materialism spreads around the world. This argument is however countered on the
basis that cultures can be resilient and semblances of similarity ought not to be used as an indicator that divergence
is no longer a necessity in international HRM.

The second factor that promotes the use of a divergence approach to HRM is the institutional structure where
different subsidiaries are autonomous and at liberty to develop their own systems. Most multinationals around the
world embrace this model where each subsidiary has a leeway in determining some of the primary elements in
their management practices. However, this leeway tends to be limited and the organizations tend to be focused on
maintaining a certain global image which they emphasize must be maintained across the world. While divergence
may enable unique approaches to HRM in different markets, it may be counterproductive to ignore best practices
in other markets. In line with this, many multinationals practice a measure of cross-vergence in their international
HRM approaches.

Cross-Vergence

Cross-vergence is an approach to HRM that combines both the convergence and divergence approaches and is the
most common HRM practice in the world. As a matter of fact, it is extremely rare to find a multinational that
practices either of the approaches in their pure form. Convergence may be applicable in providing indicators of
best practice but can be counterproductive in different cultures. Similarly, divergence is suitable in accommodating
different cultures but can be counterproductive when used in isolation. Factoring the best practice approaches is
crucial in ensuring that the success stories in other markets can be learned from. For instance, the Japanese
traditional management style that incorporated teamwork was very insightful for the Western companies which
incorporated it and combined it with their traditionally individualized approaches to yield high levels of
productivity. However, these best practices must be modified to reflect on the special circumstances of the
implementing organization. In collectivist countries such as China, the traditional work organization and reward
schemes were based on the team model where people workers would be recognized within their teams. As
organizations sought to raise their levels of productivity; they began to adopt individualized models which were
modified to conform to the Chinese realities. This trend can be said to be the same for other developing countries
such as Oman and others.

Convergence makes the best of both theoretical approaches and enables an organization to maintain its uniqueness
while also making use of the best HRM practices in the world. Moreover, it promotes agility and flexibility of
HRM systems especially when it comes to making the choice on the extent to which either of the two approaches
is to be factored in. In the designing of the cross-vergence approach, the managers are at liberty to determine to
what extent they can be Universalist and to what extent they can be divergent. The striking of an optimum balance
is crucial in making the organization competitive and this is what makes HRM a science capable of determining
the competitiveness of the organization. The common trend in regards to approach to HRM is the increased
emphasis on the strategic importance of human resources as a potential source of competitive advantage to the
organization. This calls for careful design that makes the best of both approaches.
Conclusion and recommendation

The main approaches to international HRM can be described by divergence and convergence theories. Divergence
theories emphasize the need to embrace different approaches to suit the specific circumstances of the organization
and the predominant national culture. The convergence theory on the other hand emphasizes the fact that best
practices exist that can yield remarkable results when applied across the board. The advantage of applying
convergence theories is that it involves application of practices that have been tested and found to be effective
hence lowering the risk of failure. However, it may fail when applied in cultures that are significantly different.
The divergent approach on the other hand is suitable for accommodating different cultures and is very suitable for
enhancing uniqueness of the specific national culture. This makes it easy to use it as a source of competitive
strength for the organization. However, it may involve costly trial and error escapades when used in isolation.

The general trend in the world is that multinationals find it necessary to use the cross-vergence approach which
exploits elements of both theories. It draws its foundation from exploiting best practices while seeking to achieve
uniqueness by modifying the system to reflect on the specific circumstances of the organization. This approach has
been found to be very useful in the globalised markets where the level of competition is increasingly high and
organizations are turning to their human resources for the competitive edge needed to excel. This is the
recommended approach to HRM where the organization needs to skillfully balance between the best practices and
accommodation of unique management approaches to come up with a combination that leaves the employees
satisfied, motivated and productive. Nevertheless, it is expected that even though full convergence is not likely to
be realized, HRM practices will edge towards convergence in the future.