Norton University Master of Business Administration

KINGDOM OF CAMBODIA
NATION RELIGION KING
NORTON UNIVERSITY
GRADUATE SCHOOL


ASSIGNMENT

TOPIC: Why is cultural knowledge crucial to international human

resource management?

Master’s in Business Administration

International Human Resource Management

Submitted By: BUTH Sokheang

CHHEM Sophea

DUK Sothea

HOA Seanghong

Submitted To: Dr. POU Sovann

November -2023

Subject Program: International Human Resource Management 1

Norton University Master of Business Administration

Contents Pages

Table of Contents
Contents ................................................................................ 2
Chapter 1 ..................................................................................... 4
Introduction................................................................................... 4
1.1 Introduction of the Study .......................................................... 4
Chapter 2 ..................................................................................... 4
Definition and Related Literature ........................................................... 4
2.1 Definitions ........................................................................... 4
2.2 Literature Review ................................................................... 4
Chapter 3 ..................................................................................... 5
How can an MNC use culture to its advantage? ........................................... 5
3.1 Cross-Cultural Team Building ....................................................... 5
3.2 Global Leadership Development ..................................................... 6
3.3 Talent Acquisition and Retention ................................................... 6
3.4 Performance Management........................................................... 6
3.5 Organizational Culture Alignment .................................................. 6
Chapter 4 ..................................................................................... 6
Conclusions .................................................................................... 6
4.1 Conclusion ............................................................................ 6
Chapter 5 ..................................................................................... 7
Recommendation .............................................................................. 7
5.1 Summary of Recommendation ....................................................... 7
REFERENCES ................................................................................ 8

Subject Program: International Human Resource Management 2

Norton University Master of Business Administration

Table of Figure Pages

Figure 2.1: Cross-Cultural Communication (MNCs) ........................................ 5

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Norton University Master of Business Administration

Chapter 1
Introduction

1.1 Introduction of the Study

In today's globalized business world, multinational corporations (MNCs) are operating

across international borders and managing a diverse workforce with varying cultural
backgrounds. The ability to understand, appreciate, and effectively manage cultural
differences is vital for success in international human resource management (IHRM). This
comprehensive essay explores the critical significance of cultural knowledge in IHRM,
delving into definitions, relevant literature from 5 different authors, and strategies for
MNCs to utilize culture to their advantage, concluding with recommendations for enhancing
cultural competence in HR practices. The objective of cultural knowledge in international
human resource management is Understanding and effectively managing cultural
differences are integral to the success of international business operations and it not only
helps in overcoming challenges related to communication and integration to overall success
and sustainability of global business operation.

Chapter 2
Definition and Related Literature

2.1 Definitions

Cultural knowledge in international human resource management is the basis for

promoting awareness and practice of cultural nuances and differences among employees in
multinational organizations. This includes a comprehensive understanding of the different
values, norms, communication styles, and behaviors that shape interactions and cooperation
between people from different cultural backgrounds in the workplace. We recognize that
different countries and regions have unique cultures, and this cultural knowledge allows HR
professionals to deftly navigate the complexities of a global workforce. This helps drive
effective communication strategies that transcend cultural boundaries, which in turn
creates an inclusive and culturally conscious workplace that contributes to the overall
success of the organization at an international level.

2.2 Literature Review

We need to know complex and nature of the global business environment understanding
of the role of cultural knowledge in international human resource management (IHRM). This
literature review delves into the contributions of various scholars to highlight the
significance of cultural knowledge in navigating the challenges posed by cultural diversity in
multinational corporations (MNCs). Researchers describe how to identify key cultural
dimensions such as power distance (The extent to which members of groups and structures
with less power comprehend and arrange for unequal power allocation.), individualism-
collectivism (The degree to which individuals in a society are integrated into groups.), and
masculinity-femininity (The distribution of emotional roles between the genders.). These

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Norton University Master of Business Administration
dimensions serve as a framework for understanding how cultural variations influence
management practices within MNCs. His research underscored the importance of cultural
knowledge in fostering effective communication and collaboration across diverse teams
(Hofstede, 1980). For the benefit of the discussion, the concept of cultural dilemmas was
introduced. Their study emphasized the potential for conflict as a result of cultural
differences inside international corporations. They proposed that cultural awareness is
essential for recognizing, understanding, and resolving these challenges in MNCs in order
to facilitate harmonious interactions and effective management (Trompenaars & Hampden-
Turner, 1997). The understanding of international staffing decisions by highlighting the
importance of cultural orientation. Their work suggested that considering employees'
cultural backgrounds in the selection and placement processes enhances employee
satisfaction and performance within MNCs (Dowling & Welch, 2005). The importance of
contextual factors, including culture, in influencing HRM practices within MNCs is
emphasized. His work highlighted the need for HR practitioners to consider these factors
when designing and implementing HR policies to ensure effectiveness across diverse
cultural settings (Brewster et al., 2007). Focused on aligning HR practices with local
cultural contexts within multinational corporations. Researcher emphasized the need for
HR practitioners to policies and practices to local cultural norms. This adaptation ensures
that HR strategies resonate with employees in different cultural settings, contributing to
organizational performance and employee satisfaction (Sparrow et al., 2017).

Figure 2.1: Cross-Cultural Communication (MNCs)

Chapter 3
How can an MNC use culture to its advantage?

3.1 Cross-Cultural Team Building

MNCs can harness cultural knowledge to build diverse and high-performing teams.
Understanding the cultural dynamics within a team allows leaders to leverage the strengths

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Norton University Master of Business Administration
of each team member, fostering creativity and innovation. Additionally, MNCs can
implement cross-cultural training programs to equip employees with the skills needed to
work collaboratively across borders

3.2 Global Leadership Development

MNCs can harness cultural knowledge to build diverse and high-performing teams.
Understanding the cultural dynamics within a team allows leaders to leverage the strengths
of each team member, fostering creativity and innovation. Additionally, MNCs can
implement cross-cultural training programs to equip employees with the skills needed to
work collaboratively across borders

3.3 Talent Acquisition and Retention

To attract and retain top talent globally, MNCs should integrate cultural considerations
into their talent management strategies. This involves understanding the cultural
expectations of employees, offering flexible work arrangements that respect cultural
norms, and providing opportunities for cross-cultural collaboration. Tailoring recruitment
strategies to local cultures can also enhance the organization's employer brand in different
regions.

3.4 Performance Management

Cultural knowledge is crucial in designing performance management systems that are fair
and effective across diverse cultures. MNCs can adopt performance evaluation criteria
that consider cultural variations and provide culturally sensitive feedback. This approach
ensures that performance expectations align with cultural norms, fostering a positive work
environment and improving overall employee performance.

3.5 Organizational Culture Alignment

MNCs should strive to align their organizational culture with the cultural expectations
of local markets. This involves adapting leadership styles, communication approaches, and
decision-making processes to resonate with the cultural values of each subsidiary. By
creating a culturally aligned organizational culture, MNCs enhance employee engagement,
promote a sense of belonging, and contribute to the overall success of the company in
different regions.

Chapter 4
Conclusions

4.1 Conclusion

Cultural knowledge is the most important asset in international human resource

management for global business. Multinational businesses (MNCs) can establish a
framework for effective cross-cultural communication, resolution of conflicts, and
optimization of HR practices customized to the local context by utilizing cultural insights.
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Norton University Master of Business Administration
This results in a distinct competitive advantage, which is critical for MNC success in the
dynamic global marketplace. Cultural understanding, recognized as a core component in
international human resource management, enables HR professionals to effectively develop
the complex challenges of a global workforce. This empowerment enables individuals to
implement effective communication strategies in the workplace, promoting inclusivity and
cultural understanding. In short, cultural understanding is a critical component of ensuring
the overall success of international human resource management.

Chapter 5
Recommendation

5.1 Summary of Recommendation

According to the summary of international human resource management, MNCs should

consider the following recommendations:
1) Invest in Cultural Training: Develop and implement comprehensive cultural training
programs for employees at all levels, focusing on cultural competence and effective cross-
cultural communication.
2) Foster a Culture of Inclusion: Promote a culture of diversity and inclusion within the
organization, celebrating differences and creating an environment where employees from
various cultural backgrounds feel valued and respected. Employees can express concerns
related to cross-cultural issues, and resolving conflicts.
3) Adapt HR Practices Locally: Continuously assess and adapt HR policies and practices
to align with local cultural norms and preferences. This ensures that HR strategies
resonate with employees globally.
4) Promote Cross-Cultural Learning: Encourage employees to engage in cross-cultural
learning and knowledge sharing. This can be facilitated through mentorship programs,
cultural exchange initiatives, and cross-functional collaboration.
5) Leadership Commitment: Ensure that leadership is committed to promoting and
practicing cultural knowledge within the organization. Leadership buy-in is crucial for the
successful implementation of cultural initiatives.
6) Regularly Assess Cultural Competence & Cultural Trends: Implement mechanisms to
regularly assess, enhance cultural competence and encourage HR teams to stay updated on
cultural trends and changes in the global business environment within the organization. This
can include periodic cultural audits, surveys, feedback mechanisms remain adaptable and
responsive to cultural shifts.
7) Recognize and Reward Cultural Competence: Integrate cultural competence as a part
of the performance evaluation process and recognize and reward employees who
demonstrate exceptional cultural competence in their roles.

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Norton University Master of Business Administration

REFERENCES

Hofstede G. (1980), Culture's consequences: international differences in work-related

values. Sage Publications.
Trompenaars, F. & Hampden-Turner, C. (1997), Riding the Waves of Culture:
Understanding Diversity in Global Business 2nd Edition. McGraw-Hill.
Dowling, P.J. & Welch, D.E. (2005), International Human Resource Management:
Managing People in a Multinational Context, Pennsylvania State University.
Brewster, C., Morley, M. & Mayrhofer, W. (2007), Human Resource Management in
Europe Evidence of Convergence?
Sparrow, P., Brewster, C. & Chung, C. (2017), Globalizing Human Resource Management.
Sherman, F. (2019, February, 05). The Definition of Multicultural in the Workplace.
Smallbusiness.chron.com. Retrieved From
https://smallbusiness.chron.com/definition-multicultural-workplace-15469.html

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