 In this topic, we are going to discuss about one of the variables that moderate the complexity of domestic and international human resource management, which is the cultural environment. You know that in the world there are different cultures and cultures have different values, different norms, people behave differently, Pakistani culture is different, American culture is different, and all those cultures have different norms and behaviours. So the cultural environment will be so different that your domestic or international human resource management will have a wide difference. So in order to study this cultural difference, we first need to define what is culture. Culture is a term which is used to describe a shaping process over time, shaping of what? Shaping of values, norms, and behaviours. It is a process which is relatively stable over time. Your culture which develops once, stays stable for a long period of time. Other than this, culture reflects shared knowledge. People have shared opinions, shared knowledge about events, about objects, about certain happenings, about certain rituals. So they have a shared knowledge of what has happened in their particular context. And it attenuates variability in values, behaviours, norms, and patterns of behaviour. So it reduces the variability. So the culture which people belong to, their behaviours, their norms, their values, you can see them in one way or another. So that is what a culture is. When a person moves from one culture to the other, what happens is that the person is faced with a phenomena which is called cultural shock. When you travel from one culture to another culture, if you are going for tourism, when you see the differences of a culture, you feel very pleasant. You observe them, you comment about them, some people come back and write about them. But when you have to go from one culture to another culture to do employment, work, manage people, manage yourself, that creates a problem. And you have to adjust to that situation very quickly, very quickly. So that creates a cultural shock. That cultural shock needs to be dealt with. Human resource managers, they need to do something to reduce that cultural shock. How they can do that? They can do that by creating an impression about what culture they are going to face, giving them orientation. Then giving them counseling sessions, providing help throughout that process of adjustment. Because this cultural shock, it may lead to psychological disorientation and loss of identity. When you are trying to adjust to a new cultural shock, you will feel that what is your identity? Where do I belong? What are my behaviours and norms? This is a very different situation. So that will lead to a psychological stress and loss of identity which needs to be dealt with. So that is the cultural issue of the cultural environment. Problems exist when you are talking about cultural differences. How can you differentiate cultural differences? When you research about the culture, you find out that there is no single definition of culture. Or how can you operationalize this variable? What is culture? Because culture is so thick, it is so dense, it is so complex that you cannot put it in one definition. But what you need to do, usually what happens in studies is that it is treated as an omnibus variable. Whatever you see as a difference, you say that this is a cultural difference. But it is a problem with the cultural definition. So whenever you are trying to pin something with a cultural difference, that should be done by defining culture before you go for that differentiation rather than post-hoc. And then you need to realize that national differences are not always cultural differences. Sometimes in one nation, there may be several cultures existing. For example, in our own Pakistani context, there are different cultures existing in different provinces. And they have different types of dynamics which need to be understood. So one national culture cannot be imposed on an entire country. So that needs to be dealt with. Another problem with exploring cultural differences is that whether you are going from an emic approach or you are going from an etic approach. Now this is a new concept, emic and etic. Emic approach is by defining culture-specific aspects of concepts of behavior. And an etic approach is culture-common aspects. If you say that whatever cultures exist in the world, what are the common aspects? And if you explore them, that is an etic approach. Whether these concepts exist in Pakistan, China, Indonesia or America, that is an etic approach. You are taking one concept and exploring that concept on various different cultures. And an emic approach is culture-specific aspects. Explore a specific aspect of a culture which is in-depth analysis of that particular culture which is not present in other cultures. That is an emic approach. If you go from an emic approach, you will find differences. If you go from an etic approach, you will find similarities. So both of these approaches are correct. But it depends on what type of exploration you want to make. Are you talking about similarity or are you talking about differences? The etic and emic approach, they lead to two types of hypothesis. One is the convergence hypothesis. Convergent hypothesis is that most of the cultures in the world will have similar dimensions. They will have similar qualities and characteristics. It is based on two assumptions. Number one is that there are principles of sound management that hold regardless of national environments. If you go to any national environment, you can use the same principles to manage your human resource. The second assumption is that the universality of sound management practices would lead to societies becoming more and more alike in the future. If you apply the same type of management practices on all cultures, if you apply them on all cultures, they will become universal management practices. And your cultures will start to look the same. This approach originates from your western literature, particularly from your American literature. Where they understand that the American culture or their management practices can apply on all cultures and effectively perform them. This is the convergence hypothesis. That you can use universal management practices on all types of cultures and that will make them look alike. On the other hand is the divergence hypothesis which assumes that there are cultural differences which cannot be dealt with a universal type of management practices. So you cannot impose the same kind of structure. You cannot impose the same kind of HR policies. You cannot impose the same kind of organizational culture on people belonging to different countries. So it is seen that the convergence hypothesis that focuses on macro level variables, on organizational structures, on HR policies, on compensation plans, etc. And divergence hypothesis that focuses on micro level behaviors which are behaviors, norms and values of people working in the organization. Research shows that both these hypotheses they are correct and they are applicable. And it is seen that firms are becoming more alike. That is coming from the Attic approach. You see that multinationals are taking a similar kind of personality, a similar kind of shape, a similar kind of operations all over the world. But the Attic and Amic approach is also applicable as individual behavior is maintaining cultural specificity. So if you see in various different countries, people retain their culture but they also adopt similar organizational practices. It is something which is a combination of the Amic and Attic approach. You cannot apply only one approach to understand cultures. If you want to go international, if you are operating in an international context, you must have a cultural awareness. If the managers, people who are going from parent country to the host country or people who are making policies about managing international human resources. If they will keep on thinking that the same culture is applicable everywhere or the way we do things that is correct or that may be applicable everywhere. That is not going to help an organization be successful. This is called cultural insensitivity and cultural insensitivity can lead to international business failure both at the individual and the firm level. In order to understand the culture of a particular place or a particular country, we have Hofstad's framework of national culture. This is something which you would have definitely read in your management books. It is based on four dimensions. You evaluate the culture of a country or culture of a particular location on four dimensions. Number one is individualism, collectivism. How much society is based on individualistic concepts. People do their own work, take their own responsibility, generate their own income. The society is based on a collective approach in which people operate in forms of groups. They depend on each other. They do things for each other. They have a collective sense of responsibility. So whether the culture is individualistic or collectivist. The second dimension is that of power distance between two ranks, two levels. How much power distance is there? How much do you give reverence to your bosses? How much subordinate your subordinates they feel like? For example, in western culture, where the power distance is less, people call their boss as their boss. In eastern cultures, in subcontinent cultures, where the power distance is too much, people call their boss as their boss. So even from words, you can see that how much power distance is there. And that affects how people operate in organizations. Then the third aspect is masculinity and femininity. Whether masculine variables, masculine concepts, they are more applicable in a culture of feminine concepts. And then is uncertainty and avoidance. Whether people of a particular culture, they want to avoid uncertainty. They don't want to take risks or people are risk-taking in a particular culture. On these dimensions, when you evaluate the national culture, you find differences. And that helps you understand the culture of a place and then effectively manage that particular environment.