Essay: From Ethnocentric To Geocentric Approach In IHRM: Evaluation Of A French MNC.

1 An examination of the theoretical framework developed in the Journal Article: From an ethnocentric to a geocentric approach to IHRM: The case of a French multinational company.
2  A discussion of the research approach of the journal article: From an ethnocentric to a geocentric approach to IHRM: The case of a French multinational company.
3  An assessment of the wider implications of the article for individuals involved in cross-cultural management.

Brief description of the paper being evaluated

Cross cultural management is the approach of managing the human resources across the national boundaries having different cultural norms and practice (Kamoche 1996). This report will evaluate an article based on the restructuring process of organizational culture from ethnocentric to geocentric approach. This article has conducted a research on Lemma Group, who has expanded to several Anglo-Saxon countries. The report will first provide a brief description of the article being evaluated. It will describe the topic of the article, the research undertaken in the article and some more. The report will critically evaluate the theory and literature undertaken in this particular article. Moreover, this section will critically evaluate the theories, models and concepts used in this article for comparing their relevance with the topic of the article. Apart from that, the research approach used in this article will also be evaluated in this report. It will highlight the advantages and limitation of the undertaken research methods in this article. On the other hand, the report will effectively highlight the findings and conclusion of the article. At last, the report will be highlighting on the implication of individuals involved in cross cultural management.

The topic of the article is based on the restricting of multinational organization from an ethnocentric approach to geocentric approach for better international human resource management.  The author has undertaken a research on a French multinational company for exploring its restructuring process of organizational culture from ethnocentric approach to geocentric approach on international boundaries. Moreover, the findings of the article have suggested that the Lemma Group faced extreme difficulties by applying ethnocentric approach in managing the employees of Anglo-Saxon subsidiaries. The France organizational culture is having high level of power distribution, where the organizational power is centralized among the high level managers. However, the Anglo-Saxon organizations follow formalized organizational culture, where the organizational power is equally distributed. In such situation, the France managers will be able to manage the employees in Anglo-Saxon subsidiaries having different organizational culture. The response collected from data collected process indicates timing and size issue of organization in IHRM in relation to ethnocentric approach. Hence, it is suggested for the organization to restructure into geocentric approach for better cross cultural management in IHRM.

The comprehension of international human resource management (IHRM) is dependent on the avoidance of its contextual isolation. According to Muratbekova-Touron (2008), the policies and practices of IHRM are influenced through the strategy and structure and cultural and institutional environment. The national culture and country of origin of the organizations highly influence on the practices of IHRM. On the other hand, Schuler et al. (2002) opined that the organizational culture of subsidiary organizations is formulated through greater link between national and foreign culture. The topic of the research is to explore the inefficiency of apply ethnocentric approach in managing IHRM of Lemma Group and highlighting the effectiveness of Geocentric approach. However, the author has majorly highlighted the theory of Hofstede cultural dimension. Moreover, instead of highlight the theories and concept of ethnocentrism and geocentric approach, the author has overemphasized on Hofstede cultural dimension.

Theory and Literature

Muratbekova-Touron (2008) has opined out the traditional and existing organizational hierarchy of France, which explored centralization and respected distance between the subordinates and superiors. Moreover, the organizational culture of France has existence of several rule and regulations. On the other hand, McSweeney (2002) opined that the organizational culture of Anglo-Saxon are formalized having less stringent rule and regulations. In such situation, the employees from France will be facing mush difficulties in adjusting with the formalized working culture of Anglo-Saxon countries (Brock 2005). The focus the research paper is to highlight the inefficiencies of ethnocentrism in IHRM. Moreover, the author wanted to explore the effectiveness of geocentric approach in managing the international human resources of Lemma Company. In such situation, Hofstede cultural model is effective enough to understand the cultural difference between two countries, but it does not provide any idea about the ineffectiveness of ethnocentric approach in IHRM. The author should have to concentrate on the theories and concept of ethnocentrism and geocentric approach for analyzing their influence on international human resource management. Moreover, the author should also have to make a comparison between the ethnocentric approach and geocentric approach in terms of managing international human resources.

The main research proposition was to understand the Lemma organization culture where the three characteristics that were focused were authority, particularistic culture and high-context culture. As per the methodology that was designed for the research, it is confirm that direct participation andobservation using one particular individual has been the main subject. On the other hand, semi-structured interviews were conducted with managers to find the highest frequency of keywords. Considering organizational culture, it can be said that this factor is completely dependent on the people who are operating and communicating within the organization either formally or informally (Ngo et al. 1998). The main respondent on this research acted as one of the team members who observed how people responded and how one’s perception about culture differed from other. However, since major findings of the research was dependent on one individual who acted as a per time employee, it can be considered as a biased response, which is a limitation.

The semi-structured interviews were conducted as per critical incidenttechnique. Here 24 respondents were interviewed with coding as the form of category. Since managers from different divisions and group were interviewed, hence the biasness possibility was negligible (Aycan 2005). On the other hand, in order to understand the prevailing culture, Hofstede cultural dimensions along with other famous cultural aspects were considered, which are found to be the most eminent in human resource literature. The results were analyzed for each dimension where frequency percentage was considered as the main outcome. The percentages of each dimensions were categorized in low, moderate, high and very high based on the number of times responded by managers. Therefore, it can be said that this critical incident technique using coding method was more advantageous than observation approach as the error possibility was very less. It would have been better if questionnaires were developed according to quantitative approach as close ended questions would deliver more accurate response for each dimension, which could have been later statistically analyzed.

Research Approach

Researchers’ Findings and Conclusions

The findings of the research paper suggest that Lemma Group underwent major restructuring process in forming their international human resource culture. Moreover, majority of respondents have highlighted that the ethnocentric approach increased the size of organizations in terms of human resources, geographical spreads and costs. Moreover, this approach is used to send France managers of this organization for managing the Anglo-Saxon subsidiaries. 56% of interviewed managers of the organizations have highlighted the size issues associated with the ethnocentric approach. Having pluralistic nature in ethnocentrism approach ultimately increased the size of the organization due to centralized management of the company. 60% of interviewed managers have highlighted the necessity of formalization in for coping up with the structural changes in organizational culture. Supervising huge managerial network with centralized approach leads to time issue for the organization to manage international human resources. Hence, restructuring of organizational culture is extremely important for the organization through geocentric approach. In such approach, the organization will hire local managers based on their talent irrespective of their nationality for controlling the operations of international subsidiaries.

The conclusion of the study is constructed based on the observation, interviews and documentation of the information regarding the IHRM of Lemma Group. Moreover, conclusion based on such firsthand information has led to its validity with regards to the research topic. The findings of this article have properly highlighted major cultural differences between France and Anglo-Saxon organization. Such findings are directed linked with the Hofstede cultural dimension discussed in the literature review of the article.

The article has properly highlighted the ineffectiveness of ethnocentrism approach in managing the international human resources. However, the article has some flaws like lack of proper theories related to ethnocentrism and geocentric approach in literature review. However, the findings and conclusion of the research paper can be extremely useful for the organizations focusing on international expansion and cross cultural management on international basis. This article has explored that ethnocentric approach is ineffective for international human resource management. Moreover, the article has suggested geocentric approach for IHRM, where the multinational organizations should hire local manager based on their talented and irrespective of their nationality.

Such interesting findings can help a lot to the multinational organizations in their IHRM practices for reducing the timing issues and size issues international business operations and cross cultural management. Moreover, the multinational organizations will get effective strategies for effectively managing the human resources of subsidiaries in the international countries. The article perfectly resonates with the conclusion of my learning experience regarding intercultural working. It has broadened the concepts of intercultural working through adopting with local culture of subsidiary organizations.

Reference List

Aycan, Z., 2005. ‘‘The interplay between cultural and institutional/structural contingencies in human resource management practices’’, International Journal of Human Resource Management, Vol. 16 No. 7, pp. 1083-119.

Brock, D., 2005. ‘‘Multinational acquisition integration: the role of National culture in creating synergies’’, International Business Review, Vol. 14, pp. 269-88.

Kamoche, K., 1996. ‘‘The integration-differentiation puzzle: a resource-capability perspective in international human resource management’’, International Journal of Human Resource Management, Vol. 7 No. 1, pp. 230-44.

McSweeney, B., 2002. ‘‘The essentials of scholarship: a reply to Geert Hofstede’’, Human Relations, Vol. 55 No. 11, pp. 1363-73.

Muratbekova-Touron, M., 2008. From an ethnocentric to a geocentric approach to IHRM: The case of a French multinational company. Cross Cultural Management: An International Journal, 15(4), pp.335-352.

Ngo, H.-Y., Turban, D., Lau, C.-M. and Lui, S.-Y., 1998 ‘‘Human resource practices and firm performance of multinational corporations: influences of country origin’’, International Journal of Human Resource management, Vol. 9 No. 4, pp. 632-52.

Schuler, R.S., Budhwar, P.S. and Florkowski, G.W., 2002. ‘‘International human resource management: review and critique’’, International Journal of Management Reviews, Vol. 4, No. 1, pp. 41-70