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Publisher : Elsevier - Science Direct (الزویر - ساینس دایرکت)
Journal : Human Resource Management Review, Volume 11, Issues 1–2, Spring–Summer 2001, Pages 55–72
This paper examines the interaction between cross-cultural variation in ethics and international human resource management. Literature is reviewed that suggests the ethical orientation of a culture can vary based upon whether the culture values collective outcomes or adherence to generally accepted rules, processes, and rights. Drawing on transaction cost economics and social contracts theory, it is suggested that differences in ethics between a multinational organization and its host culture(s) can damage the multinational's reputation, reduce its ethical decision-making capacity, raise its transaction costs, and reduce performance. Theory is developed suggesting the appropriate approach to international human resource management can attenuate these problems.
The competitive environment of business is becoming increasingly globalized (Kanter, 1991). A key factor that influences whether organizations are successful in the global arena is their approach to human resource management. International human resource management can be defined as the “process of procuring, allocating, and effectively utilizing human resources in a multinational corporation,” with the objective of balancing the needs of autonomy, coordination, and control for the purpose of global competitiveness, flexibility, and learning (Fisher, Schoenfeldt, & Shaw, 1999, p. 806). International human resource management encompasses a broader set of issues and also may involve more risks than human resource management limited to a particular domestic context. Perhaps one of the most salient issues in international management involves the need to balance the often-competing demands for global efficiency and local adaptation (Prahalad & Doz, 1987). For example, organizations might realize significant economies and reduce redundancy by developing products that can be introduced in multiple markets. However, organizations also face pressures from the institutional environment to adapt to local conditions. An organization's institutional environment can be defined as the set of rules, values, and norms that are considered to be legitimate in a particular context Ashforth & Gibbs, 1990 and Meyer & Rowan, 1977. Organizations adapt to pressures from their institutional environments through the process of institutional isomorphism, a mechanism that induces them to resemble other organizations that face the same institutional environment (DiMaggio & Powell, 1983). Organizations become isomorphic with their institutional environments through legal and regulatory constraints, uncertainty-reducing imitation, and by adopting legitimated managerial practices (DiMaggio & Powell, 1983). Accordingly, human resource management practices in multinational organizations are shaped by the often-competing demands for internal consistency and isomorphism with the local institutional environment Rosenzweig & Nohria, 1994 and Rosenzweig & Singh, 1991. For example, multinational organizations can potentially achieve global efficiency through the imposition of worldwide, internally consistent, human resource practices on local affiliates. Alternatively, greater conformity with local requirements can potentially be obtained by allowing local affiliates greater latitude for adopting practices that are indigenous to the host country Perlmutter, 1969, Rosenzweig & Nohria, 1994 and Rosenzweig & Singh, 1991. National culture is arguably one of the most important factors in an organization's institutional environment that influences human resource management Hofstede, 1980 and Rosenzweig & Nohria, 1994. The national culture of a parent company may influence its ability to adapt to local conditions, as well as the extent and quality of communication between the parent company and local subsidiaries. Ethics, or what is considered morally appropriate in a society, is an important element of national culture and several studies have documented the phenomenon of cross-cultural variation in ethical behaviors Carroll & Gannon, 1997, England, 1975, Hampton-Turner & Trompenaars, 1993 and Langlois & Schlegermilch, 1990. As part of a multinational organization's institutional environment, the ethical orientation of a particular culture, therefore, may have a significant impact on human resource management in multinational organizations (Carroll & Gannon, 1997). Indeed, the human resource literature is rife with examples of managers confronted with ethical dilemmas posed by operating in a culture dissimilar to their own (Carroll & Gannon, 1997). For example, faced with marginal profitability and declining circulation, Reader's Digest decided to close its Japanese subsidiary (Grundling, 1991). However, Japanese business culture includes very strong norms of lifetime employment, and layoffs are generally proscribed even in difficult economic times Abegglen, 1956, Clark, 1979, Cole, 1979, Dore, 1973, Kagono et al., 1985, Lincoln & Kalleberg, 1990 and Ornatowski, 1998. Japanese public reaction was fierce as the company was charged with “dumping” its Japanese readers and employees, and engaging in unfair, unscrupulous, and irresponsible behavior (Grundling, 1991). Contrast this with a case cited by Carroll and Gannon (1997, p. 120), in which a US subsidiary of a Japanese company laid off 83 of 94 US managers, but retained all Japanese managers. The US managers subsequently sued the Japanese company alleging ethnic discrimination. Cultures may not extend their beliefs concerning ethical conduct to individuals deemed members of an out-group Katzenstein, 1989 and Pratt, 1991. Ostensibly, Japanese companies tend to define the collective social entity to which they are ethically responsible somewhat narrowly. This paper examines the interaction between international human resource management and “ethical distance,” or the difference between the ethics of a multinational organization and the host culture(s) in which it operates. Theory is developed that suggests the appropriate alignment between ethical distance and the approach taken to international human resource management improves the relationship between a multinational organization and its host culture. This alignment enhances the organization's ethical reputation, lowering the probability that it will commit a perceived breach of ethics, and ultimately, improving organizational performance (see Fig. 1). Accordingly, Section 2 examines the issue of cross-cultural variation in ethics. Using transaction cost economics and social contracts theory, Section 3 identifies problems that may arise when a multinational organization is ethically distant from a host culture. Section 4 develops theory that suggests that the appropriately specified approach to international human resource management can mitigate some of the problems associated with ethical distance. Section 5 draws conclusions and discusses implications for future research.
نتیجه گیری انگلیسی
This paper presents a geocentric theory of international human resource management (Heenan & Perlmutter, 1979) based upon ethical differences between a multinational organization and the host culture(s) in which it operates. A geocentric approach tailors human resource management policy to a multinational's needs in a particular country or region. Thus, a geocentric approach uses global, as well as indigenous practices, and deploys human resources to their best uses. Based on extant literature, it is theorized that there is cross-cultural variation in the way that ethical decisions are made. Collective cultures tend to follow teleological ethical decision-making processes, whereas more individualistic cultures follow deontological processes. Drawing on transaction cost economics and social contracts theory, it was suggested that human resource practices can potentially affect third parties and therefore influence the relationship between organizations and society. This issue is particularly relevant to multinational organizations doing business in cultures that follow different patterns of ethical behaviors, or are ethically distant. Multinational organizations that are ethically distant from their host cultures are more likely to be perceived of as opportunistic, and prone to committing perceived breaches of ethics. This phenomenon might raise the costs of doing business in a particular location and lower organizational performance. However, the problems raised by ethical distance can potentially be managed by the appropriate approach to international human resource management. Where ethical distance is low, organizations may be able to transplant practices and utilize managers from their home country. Thus, an ethnocentric approach may be acceptable when ethical distance is low. However, a more polycentric approach may enhance ethical decision-making capacity as ethical distance increases. Organizations that adopt a polycentric approach in this context may have a more ethical reputation (perceived of as less opportunistic) and commit fewer ethical violations. Ultimately, this may enhance organizational performance. This theory has several implications for human resource management practice and future academic research. First, it suggests that ethics and cultural values are an important contingency to consider in setting human resource policy when entering or expanding activities in a foreign market. Ethical considerations will influence how human resources are deployed. The above discussion argues that the extensive use of expatriates (i.e., an ethnocentric approach) should be limited to circumstances, where ethical distance between the multinational organization and the host culture is low. This would seen highly relevant given the high cost of training and compensating expatriate managers Copeland & Griggs, 1985 and Misa & Fabriacatore, 1979, and the high failure rate of expatriate assignments (Tung, 1982). Ethical distance may also play an important role in explaining expatriate success. Expatriates may be more successful when their value system is compatible with that of the host culture. Thus, the appropriate staffing policy may facilitate individual expatriate performance. In contrast, when ethical distance is high, human resource managers might be well advised to invest in the development of policies that attract, select, and retain host country nationals rather than using costly expatriates. Another potentially relevant area of inquiry might examine how specific human resource policies influence the manner that a multinational organization is perceived in a host country. Pay differentials between lower and upper level employees appear to be greater in Western societies. Japanese organizations have compensation systems that are more egalitarian than their North American and Western European counterparts (Crystal, 1991). Research suggests that more egalitarian pay structures result in positive organizational outcomes, such as greater product quality (Cowherd & Levine, 1992), as well as higher organizational and individual performance (Bloom, 1999). Given that pay differentials appear to have a cultural component, pay practices implemented by a multinational organization that are inconsistent with the norms of a host country may be perceived of as unfair and unethical. These effects may spill over and influence the broader array of relationships that an organization might have with its host culture. This phenomenon might include other specific human resource policies, such as employee recruitment, selection, retention, promotion, and performance appraisal practices. As some of examples set forth above suggest, Japanese and American cultures seem to have very different beliefs about what is considered ethical conduct with respect to downsizing and layoff decisions Grundling, 1991 and Rousseau, 1995. Another important issue relates to how an in-group is defined for cultures that emphasize utilitarian ethics. Some cultures may not extend their concept of ethics to members of an out-group (Pratt, 1991). Thus, it may be relevant to explore how groups define their members, whether specific human resource policies affect them, and how this influences ethical decision-making. Finally, this theory raises strategic human resource management issues. Strategic human resource management can be defined as “the pattern of planned human resource deployments and activities intended to enable an organization to achieve its goals” (Wright & McMahan, 1992, p. 296). The paragraphs above argue that by tailoring human resource management policy to ethical issues, multinational organizations are better able to achieve the strategic goal of higher organizational performance. Drawing on the resource-based view of the firms Barney, 1991 and Wernerfelt, 1984, Wright, McMahan, and McWilliams (1994) discuss the role of human resources in achieving a sustained competitive advantage. The resource-based view recognizes the influence of both firm-specific resource endowments and competitive dynamics on sustained competitive advantage. Resources that are valuable, rare, inimitable, and nonsubstitutable are less likely to be copied or replaced by an organization's competitors and can therefore be a source of competitive advantage. The theory presented above argues that multinational organizations must, under certain conditions, adopt human resource practices that foster greater sensitivity, responsiveness, and information sharing with host cultures (by using a polycentric approach). However, while this approach enables multinational organizations to be more ethically sensitive, the extensive use of host country nationals may facilitate the diffusion of proprietary knowledge. From a resource-based view perspective, this may dissipate competitive advantage. For example, cultures often differ in their attitudes toward respecting intellectual property rights (Swinyard et al., 1990). In other words, there may be a competitive cost to polycentric approaches. Thus, when adopting a polycentric approach, organizations must not only consider the dual pressures for global efficiency and local adaptation (Prahalad & Doz, 1987), but also the interaction between local ethics requirements and the need to maintain a competitive advantage. How organizations achieve this balance potentially provides an interesting issue for future research. In conclusion, the strategic use of human resources within the context of international management may enable multinational organizations to balance the needs for global efficiency, local adaptation, and sustained competitive advantage. By helping organizations effectively resolve ethical dilemmas posed by operating in other cultures, the appropriately specified human resource configuration might reduce costs, promote goodwill, and contribute to the ultimate goal of global competitiveness.