ASIA PACIFIC INSTITUTE OF INFORMATION TECHNOLOGY IN COLLABORATION WITH STAFFORDSHIRE UNIVERSITY UK

Individual Assignment AN ANALYSIS OF NATIONAL CULTURE IMPACTS ON THE TRANSFER OF HRM POLICIES AND PRACTICES ACROSS BORDERS BETWEEN UNILEVER SRI LANKA AND UNILEVER UNITED KINGDOME

Module code & Title BLB 10025-3-IHRM, International Human Resource Management

Prepared by Chamila Illukkumbura (CB002598) (GF1041BA)

Date of Submission 25th October 2010 Instructor Dr. Mahesha Samaratunga

Submitted in partial fulfilment for the Degree of Bachelor of Arts (Hons) in Business Administration
Word Count (2710)

ACKNOWLEDGMENTS
I would like to thank my lecturer Dr. Mahesha Samaratunga for her immense support and guidance towards completing this assignment efficiently and effectively. Without her guidance and supervision this Study would have been short sighted. To my dear parents I own my gratitude for their unconditional support and guidance given to me, without whom I would have not come this far in life and studies.

Furthermore I would like to express my appreciation to my sister and dearest friends Eroshani Fernando, Neomal Andrew Ellawala, Sithum Dineth, Shanaz Nizam and Shehan Perera for standing by me and lending a helping hand to see me through this project. And last but not least to Business school of Asia Pacific Institute of Information Technology for providing me with the background and tools necessary for the accomplishment of this Study.

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TABLE OF CONTENT

1.

INTRODUCTION ............................................................................................................... 10 1.1 METHODOLOGY ............................................................................................................ 11

2. SECTION ONE ....................................................................................................................... 12 2.1 HOFSTEDES CULTURAL DIMENSIONS .................................................................... 12 2.2 POWER DISTANCE INDEX (PDI) ................................................................................. 13 2.3 UNCERTAINTY AVOIDANCE ...................................................................................... 13 2.4 INDIVIDUALISM / COLLECTIVISM ............................................................................ 14 2.5 MASCULINITY / FEMININITY ...................................................................................... 14 2.6 TIME ORIENTATION ...................................................................................................... 14 2.7 CRITICAL ANALYSIS OF THE CULTURAL DIMENSIONS ...................................... 15 2.8 THE EFFECTS OF VALUES, BELIEFS AND TRADITIONAL THINKING, OF HOME AND HOST ON TRANSFER OF POLICIES AND PRACTICES......................................... 15 2.9 AN ANALYSIS OF HOME AND HOST CULTURAL FACTORS ................................ 16 2.10 THE EMBEDDEDNESS OF NATIONAL CULTURE .................................................. 17 2.10.1 SRI LANKA ............................................................................................................. 17 2.10.2 UNITED KINGDOM ............................................................................................... 18 3. SECTION TWO....................................................................................................................... 19 3.1 THE IMPACT OF CULTURE ON ORGANISATIONAL STRUCTURE ....................... 19 3.2 THE INSTITUTIONAL PERSPECTIVE OF CULTURE. ............................................... 20 4. SECTION THREE ................................................................................................................... 22 4.1 HOFSTEDES CULTURAL DIMENSIONS IN TERMS OF UNILIVERS .................... 22 4.2 FACTOR RATING FOR HOME NATION AND COUNTRIES WITH SIMILAR CULTURES TO THAT OF SL IN COMPARISON TO WORLD AVERAGE ..................... 26 4.3 THE MANNER INDIVIDUAL HRM PRACTISES UNDER HOME AND HOST CULTURES EFFECT INDIVIDUALPRACTISES. ............................................................... 27 4.4 THE ACHIEVABILITY OF SUCCESSFUL TRANSFER OF INDIVIDUAL HRM PRACTISES IN TERMS OF CULTURE. .............................................................................. 28 iii

4.5 THE INFLUENCE OF THE FOUR FACTORS ON NATIONAL CULTURE ............... 29 CONCLUSION ............................................................................................................................ 31 REFERENCE ............................................................................................................................... 33 APPENDIX .................................................................................................................................. 35 7.1 APPENDIX A .................................................................................................................... 36 7.2 APPENDIX B .................................................................................................................... 37 A CRITICAL COMPARISON OF THE FOUR ORGANISATIONAL STRATEGIES ADVOCATED BY BARTLETT AND GHOSAL .................................................................. 37 7.3 APPENDIX C .................................................................................................................... 38 EFFECTIVENESS OF ACHIEVING STRATEGIC OBJECTIVES ...................................... 38

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LIST OF TABLES
Table 1 Hofsted's cultural Dimensions ............................ Error! Bookmark not defined. Table 2 Home and host Cultural factors .......................................................................... 16 Table 3 Unilever Sri Lanka cultural dimension analysis ................................................. 23 Table 4 Unilever UK cultural dimension analysis ........................................................... 25 Table 5effectiveness of individual HRM practises under home and host cultures .......... 27 Table 6 the achievability of successful transfer of individual hrm practises in terms of culture Table 7 A critical analysis of the typology of organisational structure ........................... 36 Table 8 A critical comparisons of the four organisational strategies advocated by bartlett and ghosal ........................................................................................................................ 37 Table 9 Effectiveness of achieving strategic objectives .................................................. 38

LIST OF FIGURES
Figure 1: transfer of practises ...................................................................................................... 11 Figure 2 : Comparison of Hofstede's cultural dimensions ........................................................... 13 Figure 3 Cultural factors, Source: ............................................................................................... 18 Figure 4 Organisation Model ....................................................................................................... 19 Figure 5 Factors effecting transfer ............................................................................................... 21 Figure 6 Asian Cultural dimensions............................................................................................. 22 Figure 7 UK cultural dimensions ................................................................................................ 24 Figure 8 Comparison of UK, Asian, Indian and Pakistani dimensions ....................................... 25 Figure 9 Four factor influence model .......................................................................................... 29 Figure 10 a graphical understanding ............................................................................................ 32

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LIST OF ABBREVIATIONS
MNC Multinational Company HRM- Human Resource Management IHRM- International Human resource Management USL-Unilever Sri Lanka UUK- Unilever United Kingdom P&P- Practises and Policies UG- Unilever Global COE-Country of Origin Effect HCE-Host Country Effect DE-Dominance Effect II-International Integration FFIF-Four Factor Influence Frame PDI Power Distance Index IDV- Individualism MAS- Masculinity UAI- Uncertainty Avoidance Index LTO- Long Term Orientation

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ABSTRACT
International trade and foreign direct investments have increased significantly in the past decade state Harzing and Ruysseveldt,( 2004). Via globalization of the world economies, domestic organizations have become a mere forgotten memory. For this is the ear of multinationals and global organizations Viz HRM has become a strategic tool to overcome the challenges of multiculturalism and geographic dispersion faced by all MNC;s (Adler 1983, cited in Harzing and Ruysseveldt, 2004) and thus become a tool for these industrial titans to gain a competitive advantage. When reviewing past literature from the fields of international human resource management, it is evident that numerous academics and professionals believe that in the context of the 21st century HRM is a source of sustained competitive advantage for organisations operating across borders (Aycan et al, 2000; Schuler, 2000; Sparrow and Wu, 1998 cited in Chandrakumara and Sparrow, 2004) Furthermore Bartlett and Ghoshal (1994 cited in Liu 2004) state that the effectiveness of HRM has been seen as the key to the success of MNCs. However the transfer of these practises and policies are seen to be quite problematic, (Bae et al, 1998; Hofstede, 1980; Kovach, 1994; Rosenweig & Nohria, 1994; Yuen & Kee, 1993 cited in Myloni et al, 2004). Due to national level, Company level, Institutional level, Industry level, and individual HRM practise factors as argued by Liu (2004) Furthermore the dilemma of local isomorphism vs. global integration appears to have an impact on the transfer of these practises (Harzing and Ruysseveldt, 2004). Nevertheless MNCs regardless of the above mentioned barriers still tend to transfer their policies and practises due to country of origin effect, host country effect , dominance effect and the need for international integration as advocated by Edwards (2003). National level culture is considered by many researches as a key barrier to the transfer of IHRM practises and policies. Edwards and Rees (2007) Argues that the differences in national culture dose indeed affect IHRM.

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Key Findings:- The report percents, Home and Host national cultural aspects, Hofstedes cultural dimensions, Organizational strategy and structure,

Institutionalistic perspective, Embeddedness of national culture.

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1. INTRODUCTION
The objectives of this report is to identify and analyse the manner in which national culture, values, beliefs and traditional thinking of home and host nations of a Multi National Company (MNC) affect the transfer of Human Resource Management (HRM) practises and policies(P&P) across borders. Hence in line to the above mentioned objectives, this study focuses on cultural level factors affecting the transfer of HRM. Hofstede (2001, cited in Newburry and Yakova ,2005) states culture is the collective programming of the mind that distinguishes members of one society to that of another. Hence Harzing and Ruysseveldt,( 2004) proclaim that the cultural differences of a nation lays within various levels such as: Values, Norms and Human behaviour. Thus the authors state that Values are beliefs of what is desirable, Norms to be the standards considered appropriate in society and Behaviour as any form of human action. Edwards and Rees (2006) imply that greater managerial roles played on MNCs has not created a borderless world in which these global titans are detached completely from the influence of the respective nation states viz. Laurent (1991 cited in Khilji, 2002) signify that the HR policies and practises of a MNCs is deeply rooted in the surrounding national culture. However Khilji (2002) argues that the home organization will always prefer to apply uniform HR practices across borders in the hope of creating a single corporate cultures. Moreover the need for international integration as pointed out by Harzing and Ruysseveldt (2004) may trigger MNCs to transfer polices which are formulated in the home nation. Hence Aycan et al (2000, cited in Chandrakumara and Sparrow 2004) believes that national culture has generated more interest in IHRM and comparative HRM due to the vast impact it has on the HRM practices and policy practice, preferences (Nyambegera et al ,2000 ; Sparrow and Wu ,1998 cited in Chandrakumara and Sparrow 2004). Therefore academics such as Newburry and Yakova (2005) argues that many researchers have presented different models for national cultures on the hypothesis that these societies exists and vary on specific cultural dimensions. Thus Newburry and Yakova
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(2005) state, despite the fact that researchers such as Kluckhohn and Strodtbeck (1961), Trompenaars (1994) and Triandis (1994) presented various dimensions, Hofstedes (2001) cultural dimensions are more generally accepted. Harzing and Ruysseveldt,( 2004) indicates cultural dimensions are co-related to value systems which in turn has an effect on human judgment.

1.1 METHODOLOGY
In order to understand how national culture, values, beliefs and traditional thinking of the home and host nations affect the transfer of HRM P&P, Unilever Sri Lanka (USL) a subsidiary of Unilever Global (UG) has being subjected to testing.The necessary data and information needed for the successful completion of this study has been attainted via primary and secondary research. Relevant journal articles form leading academics and authors in the fields of IHRM and national culture were used, furthermore the corporate website, other relevant web information and relevant publications has been referred. The Introduction section of the study reviews past literature and discuss the theoretical frame work needed to understand how national culture and its dimensions affect the transfer of HRM P&P. The first section will then critically analyze home and host nations culture in terms of Hofstedes Model. Furthermore the second section will analyze and understand the different cultural values, norms and beliefs (traditional thinking) in contrast to the respective nations ethnicity and religious background. The third Section will then critically analyze the manner in which the 5 cultural dimensions affect the home and host organization and measures the effectiveness of current transfer under both nations cultural aspects. The fourth and final section will then provide the necessary recommendations in order to create a more suitable transfer mechanism.

Figure 1: transfer of practises Source: (Authors work, 2010)

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2. SECTION ONE
According to Edwards and Rees (2007) the difference in national culture has a direct relationship with the organisational culture of the respective nation, hence creating much importance in terms of IHRM, the authors believe that if the home nation is insisting on a one best way approach (convergence) the organisations policy would be to minimise the impact of culture by methods such as selecting and recruiting a homogenous work force. These practices can be observed in ethnocentric organisations. However Edwards and Rees further argues that MNCs with a polycentric approach in order to encourage crossvergence and reverse diffusion would encourage a multicultural workforce, furthermore it is argued that the values of employees of developing nations differ extremely to those of the so called developed nations (Mendonca and Kanungo,1990; Nyambegera et al ,2000 ; Sparrow and Budhwar ,1997cited in Chandrakumara and Sparrow 2004). Hence following measures the cultural distance of home and host of Unilever by using Hofstedes Model.

2.1 HOFSTEDES CULTURAL DIMENSIONS

CULTURAL DIMENSIONS POWER DISTANCE UNCERTAINTY AVOIDANCE INDIVIDUALISM / COLLECTIVISM Human inequity Level of stress by unknown future Individuals relationship with primary group Individualism at work place / collectivism at home and among friends MASCULINITY / FEMININITY TIME ORIENTATION Emotional role of differentiation Peoples choice of focus on their actions. Table 1 Hofsted's cultural Dimensions Source, (Authors work, 2010) 12 Long term oriented femininity Masculinity / femininity Short term oriented Individualism USL High High UUK Low Low

The following illustrates a comparison of Hofstedes cultural dimensions of UK and Asia (It is hypothesised that Asian dimensions reflect of Sri Lankan Culture)
100 80 60 40 20 0 PDI IDV MAS UAI LTO UK Asian

Figure 2 : Comparison of Hofstede's cultural dimensions Source, (Hofstede, 2010)

2.2 POWER DISTANCE INDEX (PDI)

In accordance to Hofstede South Asians relatively has lager power distance to that of the United Kingdom (UK). It is considered a social norm in Sri Lankan organizations to address once higher management as sir or madam where as in western organization first name basis is encouraged. Nanayakkara (1993 cited in Chandrakumara and Sparrow, 2004) state most Sri Lankan managers tend to maintain power distance.

2.3 UNCERTAINTY AVOIDANCE

The above figure illustrates that the uncertainty avoidance level of south Asian are approximately 5% higher than that of the UK. Sri Lanka in 2008 has faced 51 strikes and 8 in 2009 where 65655 and 7665 man days were lost. Furthermore the island has 1961 registered trade unions as of 2009 (Industrial relations division, department of labour ,2010). Which proves that Sri Lanka has a higher level of uncertainty avoidance to that of UK.

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2.4 INDIVIDUALISM / COLLECTIVISM

According to the above testing, individualism of south Asians are more that 50% lower than that of the UK hence it can be stated that Sri Lanka is an highly collectivist nation. However this statement is partially true due to the fact that Sri Lankans despite being relatively group oriented when interacting with close family members, inner circle of friends and companions are more or less individualistic when interacting with their work environment, Thus Nanayakkara (1993 cited in Chandrakumara and Sparrow, 2004) points out that Sri Lankans display individual cultural traits in their work environment. However he argues that Sri Lankans do tend to display collective traits among family and other social interactions.

2.5 MASCULINITY / FEMININITY

The above figure indicates that the British are relatively more masculine than South Asians, hence it can be hypothesized that Sri Lankans are feminine in terms of the English. It can be argued that the British are relatively more competitive in work related activities more over they are assertive, ambitious. Furthermore it can be stated that they prefer the accumulation of wealth and material possessions, (Hofstede, 2010) rather that value relationships with family and friends and pressure quality of life as in SL.

2.6 TIME ORIENTATION

South Asians are indicated as more long term oriented society in comparison to the UK. Sri Lankan cultural values and social norms of collecting wealth and land to be handed over from generation to generation (Sinhalese term ,Family : Buudalaya ), the Buddhist and Hindu belief of reincarnation, sins and good done in ones life, family name and honour, has positively influenced Sri Lankans to become long term oriented.

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2.7 CRITICAL ANALYSIS OF THE CULTURAL DIMENSIONS

Mcsweeney (2002, cited in Edwards and Rees 2007) argues that HOFSTEDES model is vulnerable to weakness due to the fact that his model considers the national culture of a nation as homogenous which in fact in reality is not. Furthermore it is argued that it is rather difficult to generalize national culture by just subjecting a relatively small occupational group in an organisation. Boyacigiller et al (2002,cited in Harzing and Ruysseveldt, 2004) points out three main points which they believe are concerns regarding the validity of the model. 01. The methodology used is questionable. 02. The choice of nations for the study does not represent multicultural nations. 03. The obsolesce of data due to the fact of that they were gathered between 1967 and 1973.

2.8 THE EFFECTS OF VALUES, BELIEFS AND TRADITIONAL THINKING, OF HOME AND HOST ON TRANSFER OF POLICIES AND PRACTICES.
Harzing and Ruysseveldt,( 2004) as mentioned in the introductory chapter of this study proclaim that the cultural differences of a nation lays within various levels such as: values, norms and human behaviour. Thus the authors state that Values are beliefs of what is desirable, Norms to be the standards considered appropriate in society and Behaviour as any form of human action. However Harzing and Ruysseveldt,( 2004) state that even as a result of value analysis of two different cultures they give similar out comes it does not imply that the two societies are the same or that as it is implied two pees in a pod for the interpretation of values by one society can vary significantly to that of another.

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2.9 AN ANALYSIS OF HOME AND HOST CULTURAL FACTORS

CULTURAL FACTOR Ethnicity SRI LANKA Sinhalese 73.8% Moors 7.2% Indian Tamils 4.6% Sri Lankan Tamils 3.9% Others 10.5% UNITED KINGDOM English 83.6% Scottish 8.6% Welsh 4.9% Northern Irish 2.9% Black 2% Indian 1.8% Pakistani 1.2% Mixed 1.2% Other 1.6% Christian 71.6% Muslims 2.7% Hindu 1% Other 1.6% Un specified or none religious 23.1% Politeness, modestly indirectness

Religion Buddhism, Hinduism, Islam, Christianity, Sai

Values

Respecting elders. Tight family bonds with immediate and extended family. Respecting females/ Mothers / Mothers to be Astrology, Manatara (local magic) , Bad and good omens Homo sexuality is a disgrace, Young males and females are not allowed to date unless they to be wedded.

Beliefs

English ,Scottish , Irish, Welsh Folklore Homo sexuality is openly expressed. Though majority has not emotionally accepted it. Young adults are allowed to date, regardless of been engaged, yet under supervision of their parents.

Norms

Table 2 Home and host Cultural factors Source: (CIA fact book, 2010) ( Taybe 1993, Dubin 1970 cited Jackson 2002)

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2.10 THE EMBEDDEDNESS OF NATIONAL CULTURE

2.10.1 SRI LANKA

Sri Lanka is deeply embedded in its national culture, which is influence by of Indo Arian heritage, Buddhism, Hinduism, Christianity, Arabic culture and more or less by East Asian influences. However it can be argued that relative to other South Asian cultural societies the Sri Lankans are more adaptive towards practices of dominant nation, (Chandrakumara and Budhwar, 2005) thus indicating the dominance effect towards transfer (Liu , 2004) in terms of Sri Lanka. Despite the fact SL is a deeply embedded in its national culture, social values and beliefs, almost all Sri Lankans have a tendency to mimic western practises, for Example the western eating habits, educational systems, fashion, language etc. Even the SL armed forces are structured in accordance to Royal Armed forces. The reasons for such cultural adoptability of Sri Lankans are that SL has been a colony under western rule for more than 500 years, out of which it was under the rule of the British Raj for nearly 133 years (Chandrakumara and Budhwar, 2005). Hence due to British rule, English has become a second and official language of the country. Furthermore Sri Lanka spends nearly 500 million LKR per year on foreign higher education (Sri Lanka Universities grant commission, 2010) which calculates to an average 350-400 Sri Lankans receive education overseas that indicates a significant number of managers and executives are foreign educated. Chandrakumara and Sparrow( 2004) argues that regardless of the fact that Sri Lankans do exhibit Asian cultural traits in terms of family and other social interactions, Sri Lankans are keen of mixing Asian traits with western ways and management philosophies. Furthermore the authors argue that the Sri Lankan management practices are evolved from previous to Independence from British rule. Since has adopted similar western practices.

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2.10.2 UNITED KINGDOM

The UK is a united nation comprising of four sub nations - England, Wales, Scotland and north Ireland from which the total population is made of 83.6% English, 8.6%, Welsh 4.9% Scottish, 2.9% Northern Irish (CIA fact book, 2010) and 71.6% of the total population are Anglicans. Thus it can be stated that the UK has its own distinctive national culture with a world renowned and distinctive literature, cinema, music, philosophies, rugby, cricket, badminton and afternoon tea are some of smaller aspects of British culture which has become common throughout the commonwealth. In accordance to Gannon and Associates 1994, (, Taybe 1993, Dubin 1970 cited Jackson 2002) the following can be considered as British General/ organisational culture . Value of personal and psychological privacy Denigration of emotional outbursts. Friendliness and sincerity. Orderliness, patience and seeing a task through. Well defined status and roles. Love of humour Formality in work place. Good communication is expected from one another. Courteous. Preference of well defined job functions. Politeness, modestly and indirectness.

Figure 3 Cultural factors, Source: (Authors work 2010) 18

3. SECTION TWO
3.1 THE IMPACT OF CULTURE ON ORGANISATIONAL STRUCTURE
The secondary research conducted revealed that Unilever currently devisees a transnational strategy towards transferring policies and practises from home to its seven regional headquarters (RHQ). Nevertheless the findings indicate that the organisation still devises a Multi domestic/ Global strategy towards the transfers between RHQ and host. The following diagram illustrates the current transfer processes. Appendix C Illiterates a detailed analysis of the effectiveness of these Models in terms of Bartlett and Goshals teratology of organisational design and Appendix B a comparison of all models.

Figure 4 Organisation Model Source: (Authors work, 2010)

Due to the fact that USL and UUK are operating under the FMCG (fast moving consumer good) industry, the host operations of each respective host nation must be highly locally responsive. Thus USL currently devises a Multi domestic Strategy

towards IHRM which allows SL to formulate most of its individual HRM practices and policies. Therefore policies such as grievance handling procedures, industrial relations, labour law, counselling, succession planning which are closely integrated with the national cultural effects can be formulated inline to SLs national culture.
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3.2 THE INSTITUTIONAL PERSPECTIVE OF CULTURE.

According to Sparrow and Hiltrop (1994 cited in Edwards and Rees 2007 ) factors such as Role of government, Financial systems Education and training systems Labour relations systems

will combine to form a dominant logic of action in each nation that will guide management practises furthermore Edwards and Rees (2007) argues that the social, legislative and welfare factors of a respective nation will influence individual HRM practices such as recruitment and selection, dismissal of employees, formalisation of educational qualifications, industrial relations, performance based pay, employee health and safety employment contrast, and level of co- determination and

consultation. Thus it can be argued that the institutional factor of a nation plays a key role in the national culture of the respective nation. Furthermore it can be stated that in accordance to the above theory the Sri Lankan institutional factors, such as educational and training systems, legislative systems and state politics, has in turn effect towards Sri Lankans becoming more westernized regardless of their embeddedness.

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National Culture of UK Institutional level factors Social beliefs Value systems Norms

National Culture of SL Institutional level factors Social beliefs Value systems Norms Traditional thinking

HOME UK

Traditional thinking

HOST SL

Figure 5 Factors effecting transfer Source: (Authors work ,2010)

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4. SECTION THREE
4.1 HOFSTEDES CULTURAL DIMENSIONS IN TERMS OF UNILIVERS
90 80 70 60 50 40 30 20 10 0 PDI IDV MAS UAI LTO

Asian

Figure 6 Asian Cultural dimensions Source, (Hofstede, 2010)

UNILIVER SRI LANKA POWER DISTANCE

Despite the fact that in accordance to Hofstede, south Asians have higher power distance relative to that of the UK. In terms of Unilever Sri Lanka it can be observed that power distance among manager and subordinate is low. Example- an executive level employee would address his superior by first name basis.

UNCERTAINTY AVOIDANCE

The level of industrial disputes and labour arguments within the USL organization is

drastically low to that of other SL organizations. Thus indicating that the level of uncertainty avoidance in USL is rather low regales of the Sri Lankan national culture.

INDIVIDUALISM / COLLECTIVISM

Regardless of the fact that South Asians are 50% more collectivist than the British. Nanayakkara (1993 cited in Chandrakumara and Sparrow, 2004) state that Sri Lankans are more individualist than most Asians, this can be observed in operational level and higher management of the organization,

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however in line management and floor level employees indicate relatively higher levels of collectivism.

MASCULINITY / FEMININITY

Sri Lankans are feminine in terms of the English due to the fact the SL employee value family relations and quality of life over monetary value.

TIME ORIENTATION

Sri Lankans are highly long term oriented in terms of personal careers and family life. Due to lesser number of jobs and higher rate of university graduates, the competition for good working positions are high. Thus in regard to USL the scenario can be applied.

Table 3 Unilever Sri Lanka cultural dimension analysis Source: (Authors work, 2010)

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100 80 60 40 20 0 PDI IDV MAS UAI LTO UK

Figure 7 UK cultural dimensions Source, (Hofstede, 2010)

UNITED KINGDOM POWER DISTANCE

The power distance in Unilever UK is in the same level to that of SL. By national context the UK is a nation with low power distance. Manager does not seek respect by job title or description.

UNCERTAINTY AVOIDANCE

Inline to British national culture they possess a low uncertainty percentage to that of Asians, hence UUK has far less uncertainty avoidance levels to that of host nation organisations.

INDIVIDUALISM / COLLECTIVISM

The British are a race who respect the privacy of physical and psychological space. They relatively do not bother to intrude in to one s personal business unless they are invited to do so. Thus it can be observed that in terms of UUK regardless of top or floor levels, employees are more

individualistic than in the SL context.

MASCULINITY / FEMININITY

British are relatively more competitive in work related activities more over they are assertive, ambitious than Sri Lankans and accruing to Hofstede (2010) has a tendency to prefer the accumulation of wealth and material possessions thus indicating practises such as performance based pay will work rather well in the UK

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TIME ORIENTATION

It can be observed that regardless of Hofstedes findings of UK culture the employee of Unilever is rather long term oriented due to sound and transparent succession planning and clear

organizational and career goals.

Table 4 Unilever UK cultural dimension analysis Source: (Authors work, 2010)

The following graph illustrates Hofstedes dimensions of UK in comparison to Asia, and India (IND) /Pakistan (PAK) tow countries which share to some extent similar cultures to that of SL

90 80 70 60 50 40 30 20 10 0 PDI IDV MAS UAI LTO UK Asian Ind Pak

Figure 8 Comparison of UK, Asian, Indian and Pakistani dimensions (Hofstede, 2010)

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4.2 FACTOR RATING FOR HOME NATION AND COUNTRIES WITH SIMILAR CULTURES TO THAT OF SL IN COMPARISON TO WORLD AVERAGE
Dimension PDI IDV MAS UAI LTO UK 30 85 60 30 20 INDIA 72 41 50 30 55 PAKISTAN 50 10 40 65 0 ASIA 60 20 52 60 80 SINGAPORE 70 15 42 5 42 WORLD AVERAGE 50 43 50 64 45

(Hofstede, 2010)

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4.3 THE MANNER INDIVIDUAL HRM PRACTISES UNDER HOME AND HOST CULTURES EFFECT INDIVIDUALPRACTISES.
Individual HRM practices

EFFECTIVENESS OF INDIVIDUAL HRM PRACTISES UNDER HOME AND HOST CULTURES.

ORIGINATING FORM

Sri Lankan National culture USL

Values Norm s Belief s Effect ive

UK National Culture UUK

Singapore national culture RHQ

Value s Norms Belief s Effect ive

Values

Norm s

Beliefs

Effect ive

Recruitme nt/Selectio n Training and deve: Performan ce appraisal Successio n planning Grievance handling Industrial relations Counsellin g Man power planning Motivatio n Pay calculation s Leave Incentives Terminati on Labour court cases HR planning Job analysis Job Descriptio n

Host

Y -

Home RHQ

Y N

NA Y

Host Host Host Host Host

N Y Y Y Y

N Y Y Y Y

N NA NA NA NA

Host Host

Y Y

Y Y

NA NA

Host Host Host Host RHQ Host Home

Y Y

Y Y Y Y Y Y Y

NA NA NA NA NA NA NA

Y N Y Y

Table 5effectiveness of individual HRM practises under home and host cultures Source :( Authors work , 2010 ) 27

4.4 THE ACHIEVABILITY OF SUCCESSFUL TRANSFER OF INDIVIDUAL HRM PRACTISES IN TERMS OF CULTURE.
STRATEGIC OBJECTIVES NATIONAL DIFFERENCES SCALE ECONOMIES SCOPE ECONOMIES

Global efficiency

Unilever considered

has exploiting

Unilever has expanded and exploited potential scale economies.

Unilever

has

shared

investments and costs around markets and businesses.

differences in labour costs.

Multinational Flexibility

USL has managed the risk and opportunities arising from national differences.

The organization has balanced with the scales and

USL has considered about the portfolio diversification of risk and creation of options and side bets

strategic

operational flexibility.

Worldwide learning

Due the fact of devising a Multidomestic / Global approach towards Host nation. Unilever dose not achieve worldwide learning. However in terms of a global scale it devises a transnational approach thus achieving worldwide learning thorough its network of regional Head quarters.

Table 6 the achievability of successful transfer of individual hrm practises in terms of culture Source: Authors work Adopted form group assignment (adapted from Harzing and Ruysseveldt, 2004)

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4.5 THE INFLUENCE OF THE FOUR FACTORS ON NATIONAL CULTURE

Figure 9 Four factor influence model Source: (Authors work , 2010)

FACTOR

IMPACT ON TRANSFER

As argued in the 3rd section the UK (Home)

COUNTRY OF ORIGIN EFFECT (COE)

has its distinctive national culture, and is deeply embedded in their values, norms and traditional thinking. Thus it is evident that in accordance to the four factor influence frame work that COE takes place in formulation of HRM P&P. Furthermore the 3rd section indicates that SL

HOST COUNTRY EFFECT

(Host) is deeply rooted in its distinctive (Chandrakumara and Budhwar, 2005)

national cultural, however due to long period of intuitional effects Sri Lankans have a tendency to adopted or mimic western management practises.

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UK as a nation is considered to be more

DOMINANCE EFFECT

dominant than SL in terms on economic and social development indicators, Hence regardless of SLs national culture the UK will attempt to converge UK P&P, believing them to be effective as it was in terms of the UK. All MNCs must create integration of their

INTERNATIONAL INTEGRATION

international

operations,

thus

UUK

by

implementing a Multi domestic strategy has become Locally responsive however by

implementing a global strategy simultaneously it has ensured II its networks of Multiethnic and multicultural.

Table 7 Four factor influence model Source: (Authors work, 2010) (Chandrakumara and Budhwar, 2005)

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CONCLUSION
When analysing past literature it was evident that the national culture of Home and host nations of MNCs play a vital role in the transfer process of HRM P&P. The literature reveal that from the various models presented by academics for culture, Hofstedes cultural dimensions despite various criticism is still more generally accepted. Thus the above study analysis SL and UK the home and host nations for Unilever, which revealed that the cultural distance between home and host is large. Furthermore the report critically analysis the national culture of both SL and UK in terms of their values, norms and traditional thinking which proves that both nations are deeply embedded in their distinctive national culture. However it was further understood that due to long term institutional effects such as educational systems, legal systems, government, and colonial rule, Sri Lankans have a tendency to adopt or mimic western practises with minimum cultural resistance to change. Regardless of the fact that literature in the fields of IHRM and the transfer of management practises across borders points out that national culture plays a significant role. It does not completely apply to the case of Unilever, due to the factors such as; the type of industry they operate in; current Organisational strategy and structure. The FMCG industry has created a needed for Unilever to become more locally responsive thus by implementing a Multi domestic strategy it has allowed the host nation to formulate the majority of HRM P&P which in turn has assisted Unilever to avoid a rather messy situation which might arise from the barriers of national culture. Hence it is recommended that the organisation follows its current policy towards Sri Lanka as it has proven to be most effective. However as Harzing and Ruysseveldt,( 2004) points out a MNC must maintain global integration thus the author recommends that Unilever should devise a tailor-made transnational strategy, keeping in mind the unique cultural aspects of Sri Lanka and to become more locally responsive.

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Figure 10 a graphical understanding Source :( Authors work, 2010)

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REFERENCE
Article bliss,[Online], Available http://www.articlebliss.com/Art/311004/53/Analyzing-the-FastGrowing-FMCG-Industry.html(Last Accessed, September,14,2010 ) Baddar F.Z , Husan.AL , Brennan.R , James P,2009,Transferring western HRM practices to developing countries: The case of a privatized utility in Jordan. , 38 (2), 104-123 Chandrakumara .A, Budhwar.P.S. (2005) Doing Business in Sri Lanka, Thunderbird International Business Review, 41 (1), P 95- 120. Daily news,[Online], Available http://www.dailynews.lk/2010/03/23/bus03.asp(Last Accessed, September,14,2010 ) Edwards, T, Rees, C. (2006). International Human Resource Management. Dorling Kindersley (India) Pvt. Ltd, Pearson education Geert hofstede, [Online],, Available ,http://www.geert-hofstede.com/ Last Accessed, (October ,12,2010 ) Harzing, A. W. and Ruysseveldt, J.V. (eds.) (2004). International human resource management. 2nd ed. London: SAGE Publications Ltd. Hutchings .k, (2002), Improving selection process but providing managerial support : A review of cross cultural difficulties for expatriation in Australian organisations in China, Journal of Cross cultural management, p 32 Jackson. T, (2002), International HRM: a cross cultural approach, Sage Publications India (India) Pvt. Ltd Khilji.S.E, (2002), Modes of convergence and divergence: an integrated view of multinational practises in Pakistan, International journal of HRM, 13 (2), P 232-253. Lanka business online,[Online], Available http://www.lankabusinessonline.com/fullstory.php?nid=1889417267(Last Accessed, September,14,2010 ) Liu, W. (2004). The cross national transfer of HRM practices in MNCs: An integrative research model. International Journal of Manpower. 25. (6). Myloni, B., Harzing, A. K. & Mirza, H. (2004). Host country specific factors and the transfer of human resource management practices in multinational companies. International Journal of Manpower. 25. (6). Newburry.W ,Yakova.N, Standardization preferences: a function of national culture, work interdependence and local embeddednessJournal of international business studies 37,(44-60) 33

Scribd ,[Online], Available http://www.scribd.com/doc/20489832/The-Organization-ofInternational-Business-Introduction-Architecture-Structure (Scribd)(Last Accessed, September,14,2010 ) Scribd, [Online], Available http://www.scribd.com/doc/18476103/Equity-research-onFMCG(Last Accessed, September,14,2010 ) Scribd,[Online], Available http://www.scribd.com/doc/24949495/Individual-Report(Last Accessed, September,14,2010 ) Unileaver corporate website, [Online], Available http://www.Unileversrilanka.com/(Last Accessed, September,14,2010 ) Unilever sri lanka sustainable development overview, 2009 pdf Valentini.C , (2007) Global versus Cultural approach in public relationship management: the case of the European Union, Journal of communication management, 11 (2), p 117-133.

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APPENDIX

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7.1 APPENDIX A
A CRITICAL ANALYSIS OF THE TYPOLOGY OF ORGANISATIONAL STRUCTURE The following table illustrates the typology elements in term of Home and host models.
Typology elements Unilevers Global Unilevers Sri Lanka

1 Organizational design & Subsidiary role Decentralized federation Network structure Inter- subsidiary flows HQs pipeline Centres of excellence *

3 *

* * * * * * * * * *

Interdependence Total level of interdependence Level of HQ dependence Level of subsidiary dependence * *

Local responsiveness Local production Local R&D Product modification Adaptation of marketing * * * * * *

Level and type of control Total level of control Level of personal centralized control Level of bureaucratic formalized control Level of output control Level of control by socialization networks * * * * * * * * * *

Table 8 A critical analysis of the typology of organisational structure

Source: Authors work (adapted from Harzing and Ruysseveldt, 2004)

1 represented as low and 5 as high

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7.2 APPENDIX B
A CRITICAL COMPARISON OF THE FOUR ORGANISATIONAL STRATEGIES ADVOCATED BY BARTLETT AND GHOSAL
FACTOR MULTIDOMESTI C PORTER 1986 OBJECTIVE ACHIEVED
Multinational flexibility Worldwide learning Global efficacy Multinational flexibility Worldwide learning Global efficacy Country-centred Simple Global Complex global -

INTERNATIONAL

GLOBAL

TRANSNATION AL

STRUCTUR ES R

Decentralized Federation Financial Flows

Coordinated Federation

Centralized Hub

Integrated Network

Financial and knowledge flows _

Large flows of people , resource and knowledge across interdependent units

CONTROLS

Loose operational controls

Medium operational controls

Tight Financial and operational controls

Co-ordination through shared decision making.

GRAPHICAL ILLUSTRAT ION OF MODELS

Table 9 A critical comparisons of the four organisational strategies advocated by bartlett and ghosal Source (Harzing and Ruysseveldt, (2004),Edwards and Rees, (2006) Adopted form group assignment

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7.3 APPENDIX C EFFECTIVENESS OF ACHIEVING STRATEGIC OBJECTIVES

HE= highly effective ME= moderately effective IE= Ineffective
Individual HRM practices Recruitment/ Selection Training and deve: Performance appraisal Succession planning Grievance handling Industrial relations Counselling
Man power planning Motivation Pay calculations Leave Incentives Termination Labour cases court NA HE Global efficiency ME IE HE

Effectiveness under Multidomestic/Global

Multi cultural flexibility ME IE HE NA Worldwide Learning ME IE -

NA NA NA NA NA NA

NA NA NA NA NA NA

Table 10 Effectiveness of achieving strategic objectives Source: (Authors work, 2010, Adopted form group assignment)

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