HIGHER EDUCATION PROGRAMMES

MEMORANDUM
Academic Year 2023: January - June
Formative Assessment 1: Human Resource Management 3A
International HRM (HHRM331-1)
NQF Level, Credits: 7, 22
Weighting: 20%
Assessment Type: Short & Long Questions
Educator: Mr R. Adams
Examiner: Dr H. Brand
Due Date: 31 March 2023
Total: 100 Marks

Instructions:
• This paper consists of four ( 4) questions.
• It is based on Units 1 - 4 (Chapters 1- 4) of your textbook.
• All questions are compulsory.
• A Copyleaks Report will be issued via ColCampus once the assignment is
submitted. Please ensure that you follow the correct steps when uploading your
assignment, to ensure that the Copyleaks Report is correctly issued. If the
incorrect document is uploaded, or if no Copyleaks Report is issued, a mark of
zero (0) will be awarded. If the Copyleaks Report indicates that a 30% similarity
rating has been exceeded, 25% of the assessment total will be deducted from
the final grade. Where a Copyleaks Cheat Detection Report is issued, your
submission will automatically be treated as if you received a similarity rating in
excess of 30% and 25% of the assessment total will be deducted from the final
grade.
• Your assessment must be typed using:

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 o Font: Arial
o Font size: 12
o Line spacing: 1.5

The following Learning Outcomes are assessed in this assessment:

• Outline Domestic and International Human Resource Management (HRM)

differences and detail a model summarising the variables that moderate these
differences.
• Present the complexity of IHRM, the increasing potential for challenges to existing
IHRM practices and current models, and the increasing awareness of a wide number
of choices within IHRM practices due to increased transparency and faster and more
detailed diffusion of these practices across organisational units and firms.
• Critically discuss results of intercultural management studies such as Hofstede, the
Global Leadership and Organizational Behaviour Effectiveness (GLOBE) study, and
others.
• Highlight issues of standardisation and localisation.
• Elaborate on cross-border alliances with a special emphasis on equity-based
alliances.
• Discuss equity cross-border alliances that include mergers and acquisitions (M&As)
and international joint ventures (IJVs)

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Question 1 (30 Marks)
Read the excerpt below and answer the following question:

There are many definitions of culture, but the term is usually used to describe a shaping
process over time.

Organisational culture refers to a company's mission, objectives, expectations, and

values that guide its employees. Businesses with an organisational culture tend to be
more successful than less structured companies because they have systems that
promote employee performance, productivity, and engagement.

Companies with a strong work culture appeal to job candidates looking for a permanent
position and the opportunity for growth. Organisational culture promotes a positive,
structured work environment that helps companies succeed and motivates everyone to
do their best work.

Background

You are the newly appointed Head of Talent & Culture for Argon Air and recently
transferred to their head office in Johannesburg. Argon Air is an international player in
transporting passengers and freight. Your primary responsibility is establishing a culture
‘hub’ within the company’s International Human Resources Management (IHRM)
Department, which would be responsible for the company’s Southern Africa operations.

Required

Your first task by the executive team of Argon Air Southern Africa is to critically analyse
the impact of the ‘cultural environment’ & ‘cultural awareness on the organisation (Argon
Air) and report back to the executive team.

Note to Grader(s): Award 30 marks (maximum). Aspects indicated below are a

summary of the most pertinent information. Grader discretion is advised, as
students are expected to state the information in their own words.

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Solution: Unit 1, (Chapter 1, Pages 9 – 11)

The shaping process, referred to in the extract above, generates relative stability, √
reflecting a shared knowledge structure √that reduces variability in values, behavioural
norms, and behaviour patterns. √

An essential characteristic of culture is that it is so subtle a process that one is not

always conscious √of the relationship to values, attitudes, and behaviours. √ One
usually must be confronted with a different culture to appreciate the effect fully. √

Anyone travelling abroad, either as a tourist or on business, experiences situations that

demonstrate cultural differences√ in language, food, dress, hygiene, and attitudes to
time. √ While a traveller/tourist can perceive these differences as novel, even enjoyable,
√for people required to live and work in a country, such differences can prove
challenging. √

They may experience culture shock√ – a phenomenon experienced by people who

move across cultures. √ The new environment requires many adjustments in a relatively
short period, √challenging people’s frames of reference to such an extent that their
sense of self, especially in terms of nationality, comes into question. √

People, in effect, experience a shock reaction to new cultural experiences that cause
psychological disorientation √because they misunderstand or do not recognise essential
cues. √ Culture shock can lead to negative feelings about the host country and its
people and a longing to return home. √ Because international business involves the
interaction and movement of people across national boundaries, an appreciation of
cultural differences and when these differences are significant are essential. √

Research into these aspects has assisted in understanding the cultural environment as
an essential variable that moderates differences between domestic and IHRM. √
Despite the methodological concerns about cross-cultural research, it is now generally
recognised that culturally insensitive√ attitudes and behaviours stemming from

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ignorance or misguided beliefs are inappropriate and can often contribute to
international business failure. √ Therefore, an awareness of cultural differences√ is
essential for the HR manager at corporate headquarters and in the host location. √
Activities such as hiring, promoting, rewarding, and dismissal will be determined by the
legal context and practices of the host country √and are usually based on a value
system relevant to the country’s culture. √

A company may decide to head up a new overseas operation with an expatriate general
manager but appoint a local national as the HR department manager√ to ensure that
they have a person familiar with the host company’s HR practices. √ The approach can
assist in avoiding problems but may still lead to dilemmas for senior managers. √

Coping with cultural differences and recognising how and when these differences are
relevant are constant challenges for international firms. √ Helping to prepare assignees
and their families for working and living in a new cultural environment √has become an
important activity for HR departments in those Multinational Enterprises that appreciate
the cultural environment’s impact on staff performance and well-being. √

The following Learning Outcomes are assessed in this question:

➢ Outline Domestic and International Human Resource Management (HRM)
differences and detail a model summarising the variables that moderate
these differences.
➢ Present the complexity of IHRM, the increasing potential for challenges to
existing IHRM practices and current models, and the increasing awareness
of a wide number of choices within IHRM practices due to increased
transparency and faster and more detailed diffusion of these practices
across organisational units and firms.

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Question 2 (29 Marks)
Read the excerpt below and answer the question to follow:

Hofstede's Cultural Dimensions Theory provides a framework for comprehending how

cultures vary between nations and how business is conducted in various cultural
contexts. In other words, the framework is used to evaluate the characteristics of
culture, distinguish between multiple national cultures, and evaluate the influence of
each on a business environment.

Source:
Corporate Finance Institute. 2021. Hofstede’s Cultural Dimensions Theory - Overview
and Categories. Available at:
https://corporatefinanceinstitute.com/resources/knowledge/other/hofstedes-cultural-
dimensions-theory/ [Accessed 24 October 2022].

Hofstede’s cultural dimensions theory is one of the cultural theories that has withstood
the test of time. Hofstede's theory of cultural dimensions, which MCNs absorb and
incorporate into their HRM practice, gives them a competitive edge in the international
business climate.

Required
Identify and critically examine the four (4) underlying dimensions that form the focal
point of Hofstede’s cross-cultural management study.

Solution: Unit 2: Chapter 2, Pages 25 - 32:

Note to Grader(s): Award 1 x mark per dimension identified (to a maximum of 4)

and 25 marks (maximum), for the critical examination.

Power distance√
• This dimension represents the scale on which the members of a culture accept that
power is not distributed equally in institutions. √

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• It expresses the emotional distance between employees and superiors. √
• Power inequality exists in many cultures but may differ from culture to culture. √
• Societies marked by high power distance and high-power inequality accept a
hierarchical organisation structure in which every individual can occupy their place
without any need for justification. √
• Cultures with low power distance aspire to equal power distribution and demand
explanations for any instance of formalised power inequality. √

Uncertainty avoidance√
• The cultural dimension of uncertainty avoidance represents the extent to which the
members of a culture feel threatened by uncertain, ambiguous and/or unstructured
situations and try to avoid them. √
• Cultures with strong uncertainty avoidance are characterised by strict beliefs and
behavioural codes and do not tolerate people and ideas that deviate from these. In
cultures with weak uncertainty avoidance, the significance of practice exceeds the
significance of principles, and there is a high tolerance for deviations. √
• The major difference between countries with differing Uncertainty Avoidance Index
scores is the reaction of individuals to time pressure or uncertainties in the future.
People try to influence and control the future to a varying extent. √
• Just like the power distance dimension, the uncertainty avoidance dimension implies
consequences for the structure of organisations. √
• Hofstede even goes so far as to claim that countries with weaker uncertainty
avoidance are more likely to bring about fundamental innovations because they
have a greater tolerance for deviate thinking. √

Femininity vs masculinity√
• The cultural dimension of femininity vs masculinity identified by Hofstede assumes
that values can be distinguished as more masculine or more feminine. √
• The masculine orientation comprises the pursuit of financial success, heroism, and a
robust performance approach; the feminine orientation contains preferences for life
quality, modesty, and interpersonal relationships. √

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• Furthermore, role flexibility in feminine-oriented cultures is more clear-cut than in
masculine cultures; in other words, the roles of the sexes can overlap. √
• The fundamental difference between the two approaches is the form of social roles
attributed to gender by the relevant society. √

Individualism vs collectivism√
• The dimension describes the extent to which individual initiative and caring for
oneself and relatives is preferred by society as opposed to, for example, public
assistance or the concept of extended family. √
• In more individualist cultures, there is a more casual network of relationships
between people. √
• More collective cultures, on the contrary, have closer, more clearly defined systems
of relationships. √
• This applies both to extended families as well as companies. A clear line is drawn
between one’s group and other groups. √
• In exchange for the care offered by their group, the group member develops a sense
of loyalty to the group. √
• The distinguishing aspect of this dimension is the predominant self-sufficiency
among individuals in a society. √
• Regarding professional life, collectivist companies differ from individualist companies
in that the relationship between the superior and the employee in collectivist
structures can be described as more informal. √
• Furthermore, recruitment and career progression are often within the in-group. The
dyad comprises the supervisor and employees trusted and favoured by the
supervisor and expected to work harder. √
• Management means management of groups, and the reward systems are frequently
group-oriented. √
• On the contrary, individualist companies focus on individual aspects when
structuring reward systems. √
• The superior and the employee relationship is usually based on a relatively neutral,
impersonal contractual foundation. √

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The following Learning Outcomes are assessed in this question:
➢ Critically discuss results of intercultural management studies such as Hofstede, the
Global Leadership and Organizational Behaviour Effectiveness (GLOBE) study, and
others.

Question 3 (25 Marks)

Read the excerpt below and answer the question to follow:
The standardisation and localisation of HRM practices are two (2) of the most
significant organisational processes globally. Although there is no connection
between standardisation and localisation, the two (2) processes occur independently
as global commerce develops, and as a result, both are crucial elements of a
business. Firms nowadays strive for differentiate according to audience with respect
to their language and quality standards.

Required
Within the context of Multi-National Enterprises (MNEs), critically differentiate between
the contemporary issues related to ‘standardisation and localisation’.

Note to Grader(s): Award 25 marks maximum. Discretion is advised, as students

are expected to state the information in their own words. Aspects indicated below
are a summary of the most pertinent information.

Solution: Unit 3, (Chapter 3, Pages 48 - 52)

To ensure that proper work practices are successfully implemented, expatriates are
regularly utilised. √ But eventually, multinational management switches out foreign
workers for local ones, anticipating that business as usual will continue. √ This strategy
is founded on the idea that local recruiting processes and training initiatives have
established suitable behaviour in the workforce. √ The local personnel have
inadvertently adopted the multinational's methods of conducting business. √ The
multinational's corporate culture will serve as a covert, unofficial control mechanism in
place of direct monitoring. √

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However, this strategy depends on the local workforce's commitment to upholding
corporate standards of conduct, √ the efficacy of expatriates as socialisation facilitators,
√ and if cost concerns have prompted the multinational to localise management
prematurely. √ In this circumstance, the function of suitable HRM activities becomes
crucial. √ Globalising HRM methods accomplish a globally distributed workforce's
uniformity, transparency, and alignment around shared values and objectives. √ Using
standardised management procedures √aims to promote equity among managers
engaged in cross-border activities while fostering a mutual understanding of workers'
expectations. √

Consistent systems also facilitate administrative procedures by enhancing operational

effectiveness. √ Developing local responsiveness is to follow regional cultural norms,
laws, and/or other institutional restraints, √such as government HRM and work practice
policies and/or educational systems. √ As was previously indicated, trying to apply
strategies and tactics that have worked well in one setting might not work as well in
another. √

The difficulty of creating a system that can work well in several nations while utilising
local peculiarities and interdependencies while maintaining worldwide consistency is
one that many multinational organisations must overcome. √ For instance, Unilever
uses consistent hiring practices and an evaluation system worldwide√ to guarantee that
every subsidiary displays the same management behaviour. √ However, national
education system peculiarities and skill levels must be considered. √

The decision between standardisation and localisation that the multinational must make
in a functional area like marketing also applies to managing the global workforce. √ This
is because HRM acts as an organisational strategic support function. √ Several
localisation elements influence HRM system localisation or standardisation. √ "HRM
balance between standardisation and localisation" is the term used to describe this. √

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Strategy structure, business size, and maturity affect how precisely a firm balances
standardisation and localisation of HRM. √ When it comes to standardisation, corporate
culture strength is crucial; √ however, when it comes to localisation, the cultural and
institutional context, including the characteristics of the local organisation, like its
method of operation and subsidiary function, is crucial. √ Harzing claims that there are a
variety of advantages to standardisation and localisation. √

The following Learning Outcome is assessed in this question:

➢ Highlight issues of standardisation and localisation.

Question 4 (16 Marks)

Read the excerpt below and answer the question to follow:
Businesses must continually adapt and reorganise to survive and expand in a
globalised and fiercely competitive economic climate.

Radical enterprise restructuring, like mergers and acquisitions (M&As), frequently

occurs. M&A’s have human costs, just like any other type of restructuring, and they
impact more than just the employers and employees of the target companies. Lack of
consideration for the human aspect of M&As may hinder progress or even result in utter
failure. Today's mergers and acquisitions are routine in business, highlighting the HR
function's knowledge and abilities at what may be trying times for employees.

Source:
Ilo.org. 2022. Available at: https://www.ilo.org/wcmsp5/groups/public/---
ed_emp/documents/publication/wcms_142321.pdf [Accessed 25 October 2022].

Required
The board of directors of a large international firm has hired you as an international HR
consultant to advise them about the function of HR in mergers and acquisitions (M &
A’s).

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Critically examine how strategic HR management concepts should be used to handle
M&A’s and explain the HR function's role to the board of directors.

Note to Grader(s): Award 16 marks maximum

Solution: Unit 4 – (Chapter 4, Page 88)

• Aguilera and Dencker suggest a strategic approach to HR management in M&A
processes. √
• Strategic HRM literature suggests a fit between business strategy and HR strategy,
implying firms should match their M&A strategy with their HR strategy while relying
on three conceptual tools. √
• Resources are tangible assets like money and people, and intangible assets, like
brands and relationships. √
• In the context of HRM in M&A, decisions about resources involve staffing and
retention issues, with termination decisions particularly important. √
• Processes refer to activities firms use to convert resources into valuable goods and
services, like training and development programs and appraisal and reward
systems. √
• Finally, values are how employees think about what they do and why they do it.
Values shape employees’ priorities and decision-making. √
• These ideas deliver starting points for developing HR strategies for the newly
created entity and provide a basis for consideration of how to meet the intra-merger
or intra-acquisition HR challenges. √
• Taking a strategic approach and aligning the HRM activities with the M&A strategy
concerning resources, processes, and values is a challenging task for the HR
manager to perform √
• The HR manager must develop a set of integrated HR activities which are in line
with the business strategy but with the M&A strategy as well. √
• The HR function can take the role of strategic partner (i.e., management of strategic
HR) √, administrative expert (i.e., control of the firm’s infrastructure) √, employee

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 champion (i.e., management of the employee contribution), √ or change agent (i.e.,
the direction of transformation and change). √
• In each phase of the M&A process, each role involves different activities, and an
emerging integrated HR strategy within M&As, √mainly due to the interplay of the
various Intra organisational micropolitical forces and the influence and factors from
the institutional and industrial environment. √
• M&A’s may provide an excellent basis to reconsider a company’s HR strategy and
place the HR function in an important position as a key actor √responsible for
intercultural integration and consideration of the legal environment of the various
labour markets. √
• There is a danger that, due to unfavourable micropolitical conditions within the
merger, a company may not utilise the full strengths of its HRM function. √

The following Learning Outcomes are assessed in this question:

➢ Elaborate on cross-border alliances with a special emphasis on equity-based

alliances.
➢ Discuss equity cross-border alliances that include mergers and acquisitions (M&As)
and international joint ventures (IJVs)

TOTAL: 100 Marks

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