Organizational Culture and Human Resource

Management
Labour Relations & Cultural Fit
Cultural Fit
Organizational Culture:
Organizations vision and goals
Values
Rules
Language
Habits
Everything 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 days
Among 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)
2)
3)
4)
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Minimum wage
Denmark: 20$/hour
Vietnam: 45$/month
Maximum working hours per week
Denmark: 37,5 hours
Vietnam: 48 hours
Maternity leave
Denmark: 52 weeks, paid leave
Vietnam: 26 weeks, unpaid leave
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 employees
Example: 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 country
Example: