Features Of Hrm In The Usa And In Europe Business Essay Example

is to enhance production efficiency and decrease operational costs to gain a competitive advantage.

On the other hand, European HRM practices are less formal compared to the American system. There are fewer organizational charts, and a line management system is preferred. Communication plays an essential role in fostering workforce commitment; thus, MPS in the USA conducts regular staff feedback sessions and annual surveys to fulfill employee needs. These surveys also aid in comparing compensation and benefits against competitors for long-term staff retention.

In the UK, France, and Sweden, MPS's European subsidiaries encounter issues with the feedback mechanism mentioned by Brewster et al. Two common methods of communication between employees and employers in Europe include line direction as well as trade brotherhoods or work councils. Instead of using a direct feedback system like their American counterparts, European workers prefer communicating through their line directorsTo comply with European law, MPS has established work councils, which is not favored in America according to Pieper. The main distinction between American HRM and European HRM lies in the influence and control of state regulations. Workers in the USA have less protection compared to those in Europe. Studies indicate that most workers in the USA exceed 40 working hours per week while Europeans are restricted to 35 hours per week with overtime limited to 130 hours per year. Employment policies in Europe are strictly regulated by legislative requirements such as minimum wages, working hours, and public holidays which are enforced through employment contracts.

MPS is facing challenges in UK and France as their workers are hesitant to work extra hours or weekends despite MPS being willing to compensate for this additional work. The American

culture emphasizes individualism, independence, and achievement-oriented work. On the other hand, the European culture generally exhibits less independence and lacks entrepreneurialism.

MPS has traditionally implemented a Performance Management and Rewards System (PMRS) that follows strict standards and goal-setting for individual and group performance. In contrast, HRM practices in the USA focus on conducting fair performance assessments, emphasizing measurable aspects of goal-setting and reviews.In the USA, employees are motivated to exceed expectations and have their efforts reflected in performance assessments, resulting in better rewards. In Europe, there is generally broader support for trade unions and employee representation in the workplace. However, the influence of unions varies by country. According to Trade Union Density statistics from OECD.StatExtracts in 2008, Sweden has the highest union density at 68.3%, followed by the UK at 27.1%, France at 7.7%, and the USA at 11.9%. European law requires trade unions to be recognized for collective bargaining, making union representatives essential in management decisions related to HR policies and practices.

Conflict between unions and employees arose in the UK and Sweden due to disagreements with an introduced American performance management system that they found too harsh and lacking their control. Both France and Sweden have mandatory work councils consisting of union members who hold managerial decision-making power.

On the other hand, in the USA, the American HRM model emphasizes "management's right to manage" (Brewster, 1995). Research has shown distinct differences between this model and HRM practices in Europe. Therefore, it is crucial for MPS to understand both national culture and legal systems of European host countries during the enlargement exercise.This knowledge will assist MPS in determining whether to adopt local standards or maintain their home

country's HRM practices in international ventures. Most studies on HRM practices and their role in organizational competitive advantage are based on US research because the concept originated and developed there. However, Brewster recognized the need for European models of HRM due to variations in the business environment between Europe and America (Brewster, 1995 cited by Stavrou et al., 2004). Interviews with Euro-HRM experts conducted by Claus in 2003 revealed that different HRM practices exist within European countries, although there is no single European model of HRM. In 2002, the European Union successfully implemented a common currency (the Euro) and other shared regulations among member states. The efforts to promote "Europeanization" have had economic as well as political, institutional, and cultural effects. The establishment of the EU has significantly impacted HRM practices in EU countries. HRM experts have been attempting to identify common HRM principles in Europe by considering geographical, cultural, institutional, and organizational factors that contribute to convergence. While there are shared HRM principles practiced in European organizations, there are also differences influenced by geographical conditions. Ronen and Shenkar (1985) classified European countries into four groups based on their cultural and geographic characteristics as shown in Table 2.
According to Sparrow and Hiltrop (1997), each European group would have its own distinct HRM approach influenced by their national cultures as the main factor determining HRM practices. Table 2, based on Ronen and Shenkar's (1985) research, categorizes European countries into clusters including State, Scandinavian, Germanic, Anglo, and Latin. The convergence and divergence of European HRM patterns are still evolving in Europe. Divergence will persist due to cultural differences, social conditions, and legal systems. However, common management doctrines

and organizational behavior similarities will lead to convergence in HRM patterns across Europe (Mayrhofer and Brewster, 2005). Although some distinctive features of European HRM patterns compared to the American model have been identified, further studies and coordination efforts are necessary to identify and integrate common HRM practices in Europe. Despite this ongoing process, many European organizations already exhibit pan-European HRM characteristics; however, a clear theoretical model of European HRM has yet to be established (Sparrow and Hiltrop, 1997). Therefore, it is more appropriate to refer to it as "HRM in Europe" rather than the "European Model of HRM." Additionally, it should be noted that the European Union does not encompass all of Europe (Communal and Brewster 2004).In relation to Question 3(a), there are three well-known theoretical models for national cultures in international cultural surveys: Hofstede's cultural dimensions, Trompenaars' cultural dimensions, and Lane, Distefano, and Maznevski's value orientation-based cultural dimensions. Generally, Hofstede focuses on values as the central aspect of culture while Trompenaars emphasizes the significance of meanings. However, Lane et al. argue that value orientations play a vital role in understanding civilizations (Romani , L., 2004). Nevertheless, all three theoretical models agree on the interconnectedness between values, meanings,and value orientation with cultures.

Hofstede conducted research on cross-cultural studies and identified four primary cultural dimensions related to work-related values at the national level. These dimensions include 'power distance', 'individualism versus Bolshevism', 'masculinity versus femininity', and 'uncertainty avoidance'. Later on, he collaborated with Michael Bond to develop a fifth dimension known as 'long-term versus short-term orientation'. Hofstede's cultural dimensions focus specifically on the differences in culture based on ideas and social actions at the national level.

The text also

discusses Trompenaars' cultural dimensions which encompass concepts such as 'Neutral versus Affective', 'individualism versus communitarianism', 'universalism versus particularism', 'achievement versus attribution', 'specificity versus diffuseness', 'sequential versus synchronic', and finally ‘inner vs outer directedness’.Lane, DiStefano, and Maznevski further expand upon Hofstede's research by proposing that cultures are influenced by shared meanings that impact management practices. They adapt value orientation theories introduced by Kluckhohn and Strodtbeck in cross-cultural studies to develop their own cultural analysis. In this analysis, they use a set of items to measure beliefs associated with each variation of the six orientations. Table 3 below, credited to Lane, DiStefano, and Maznevski, presents these six orientations and their respective variations. The table is titled "VALUE ORIENTATIONS AND THEIR RANGE OF VARIATION" and includes two subheadings: "Value Orientations" and "Variations." The value orientations listed in the table are: - Activity: Making; Being; Thinking/Controlling - Relationship: Individuality; Collectivism; Hierarchy - Human Nature: Good; Evil; Changeability - Environment: Mastery; Harmony; Subjugation - Time: Past; Present; Future - Space: Public; Private; Mixed At the end of the table, there is another heading that reads "Beginning: Lane, DiStefano and Maznevski, 2000." Both Hofstede's and Trompenaars' cultural dimensions share a common characteristic as both are bipolar-based. This means respondents must choose between two mutually exclusive options. However, Lane, DiStefano, and Maznevski's value orientations offer three options for each orientation.This text discusses the impact of culture on HRM and highlights varying degrees of preference for each orientation, improving accuracy and predictability of cultural response. Uysal (2009) emphasizes that culture significantly affects HRM, especially in terms of individualism and collectivism. Table 4 displays how 50 countries position themselves on power distance and individualism

versus collectivism using Hofstede's cultural dimensions. Brewster (2004) suggests that the USA's highly individualistic culture leads to a strong focus on performance in the workplace.

The text also explores the relationship between corporate culture, trade union recognition, and national cultures in countries where MPS operates. While European countries often have trade union recognition due to their corporate culture, it is noted that the USA, UK (Great Britain), and Sweden share similar characteristics with low power distance and individualism. On the other hand, France has a higher power distance and exhibits signs of an individualistic culture.

Understanding these cultural differences is crucial for MPS to effectively implement HRM policies among their foreign subordinates. Cultural theories suggest that national cultural differences influence managerial beliefs and actions. Hofstede's research in 1980 further underscores how national culture influences work values within large MSCs with strong organizational cultures.The three models of cultural dimensions discussed by Claus (2003) offer ways to assess shared patterns, beliefs, and values across diverse cultural communities. For multinational corporation MPS, the acceptance and compatibility of host countries in Europe are crucial when implementing HRM practices and maintaining a strong organizational culture. However, it is important to note that some organizational cultures ingrained within the company may not be suitable for implementation in subsidiaries with different national cultural backgrounds. For instance, while MPS in America emphasizes formalization of processes and performance orientation, these values may not align with employees in European subsidiaries due to their higher collectivism and lower individualism compared to Americans. Therefore, MNCs must carefully consider how their strong organizational culture aligns with that of their subsidiaries and anticipate potential resistance when introducing HRM practices. Ultimately, transferring

organizational cultures and HRM practices requires caution on the part of MNCs as they navigate the influence of national culture on HRM policies.