MGMT3025 Chap.2 The Cultural and Institutional Context of IHRM
The Cultural and Institutional Context of IHRM
Every HR policy a multinational exports lands in a different culture and a different set of institutions. This chapter starts with what culture is: a shared way of behaving and believing, built from communication, thought, feeling and behaviour, and layered in Schein's model from visible artefacts through stated values to unconscious underlying assumptions.
It then compares the four frameworks the course uses to contrast countries, Hofstede, GLOBE, Trompenaars and Hampden-Turner, and Hall and Hall, with the evidence each rests on and the critiques the lecture records. Next it shows how a dimension such as power distance or uncertainty avoidance changes leadership, training, appraisal and rewards in practice.
The chapter closes with the institutional side of context: the host-country effect, the country-of-origin effect and reverse diffusion, and why cultures themselves keep changing through generational shifts, ageing workforces and globalisation. Throughout, the frameworks are treated as hypotheses about groups to be tested against the facts of a case, not as descriptions of any one individual.
What this chapter covers
- 01
Culture defined and its four building blocks
- 02
Schein's layers: artefacts, values and underlying assumptions
- 03
Hofstede, GLOBE, Trompenaars and Hall compared with their critiques
- 04
Applying cultural dimensions to recruitment, training, appraisal and rewards
- 05
How generational change and globalisation shift cultures
- 06
Host-country, country-of-origin and reverse diffusion effects
Worked example · free
Which layer of culture explains silent safety briefings at a shipping office?
- +1Ship models and uniform safety colours are artefacts: visible symbols and structures above the waterline.
- +1The speak-up statement is a value: what the group says it believes, held only partly consciously.
- +1Never questioning a captain, unremarked by anyone, is an underlying assumption about human relationships and authority.
- +2Influence runs more strongly upward from assumptions to values and artefacts, so the unspoken deference outweighs the poster.
- +1Conclude that the policy must work on the assumption, for example captains inviting challenge in every briefing, not on new signage.
Key terms
- Underlying assumptions
- The deepest layer in Schein's model: unconscious, taken-for-granted beliefs that shape a group's values and visible artefacts.
- Power distance
- A cultural dimension describing how far people accept that power is distributed unequally.
- Uncertainty avoidance
- A dimension measuring how comfortable a society is with ambiguity, which affects how much structure and rules people want.
- High context communication
- A communication style in which cultures rely on indirect messages, one of the context dimensions in Hall and Hall's framework.
- Reverse diffusion
- The transfer of an HR practice from a foreign subsidiary back to the multinational's headquarters.
The Cultural and Institutional Context of IHRM FAQ
What are the three layers in Schein's model of culture?
Artefacts are visible structures, symbols and processes. Values are partly conscious and describe the beliefs a group professes. Underlying assumptions are unconscious convictions that nobody questions. The lecture adds that influence flows more strongly from assumptions upward than from artefacts downward, so changing a visible policy seldom changes the deeper belief beneath it.
How do the Hofstede, GLOBE, Trompenaars and Hall frameworks differ?
Hofstede offers six dimensions drawn from IBM staff questionnaires; GLOBE nine dimensions from a leadership study by more than 170 scholars; Trompenaars and Hampden-Turner seven dimensions from surveys of training participants; and Hall and Hall four dimensions about communication and time. Each has limits, such as treating the nation as the unit of culture.
What are the main criticisms of Hofstede's study?
The lecture lists several: culture is reduced to national values, values are not separated from behaviour, countries rather than cultures are the unit of analysis, which troubles multicultural states, and the sample came entirely from IBM employees. National culture is also not the only force on behaviour. The model has since been revised as the Minkov-Hofstede model.
How does culture change everyday HR practice?
The lecture connects each dimension to HR choices. Power distance affects leadership style and consultation; individualism affects whether appraisal and bonuses are individual or team based; uncertainty avoidance affects how structured training and policies must be; long-term orientation affects succession planning and development spending. Cross-cultural training becomes essential once a firm employs several cultures.
What is the difference between the host-country and country-of-origin effects?
The host-country effect describes subsidiary HR practice shaped by local institutions such as labour law. The country-of-origin effect describes a multinational moulded by its home institutions and carrying those practices out to its subsidiaries. A third effect, reverse diffusion, runs the other way, when a subsidiary practice is adopted by headquarters.
Exam move
Make one comparison table of the four frameworks with their dimension counts, evidence base and main critique, because quiz items test precise recognition of which framework owns which dimension. Then practise turning dimensions into HR consequences: take one HR practice, such as a bonus, a training course or a feedback meeting, and write how two different positions on a dimension would change it.
For case questions, diagnose before you prescribe: name the dimension or layer, quote the fact that signals it, and only then recommend. Finish by learning the three institutional effects with one invented example each, so you can separate cultural from institutional explanations in a single answer.
Before the exam, rehearse one complete case paragraph that names a layer or dimension, quotes the signalling fact and ends with a concrete HR change.
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