With reference to the information you collected in Assessment 1 report and other relevant factors, advise/make recommendations the MNC on the following:
(i) The desirability; and
(ii) The feasibility of transferring the HR practices to the subsidiary in the host country.
ALL the references in the reference list to be connected with the report.
Structure of the report:
Main body (2000 words)
2 COMPARISON OF THE CULTURAL AND INSTITUTIONAL CHARACTERISTICS
Using the assessment 1, a brief comparison between the two countries from Hofstede and Hall theory and institutional characteristics and why this is important.
Don’t use references from the assessment 1, use it as appendix.
2 DETERMINATNS OF TRANSFER
Here you will use Schuler Montel and you will connect it with UK AND INDIA as well as THE HIGH TECH ELECTRONIC FIRM.
• What is Schuler Montel
• Exogenous Factors (is about India)
A) type of business/type of industry
B) nature of competitors (are there other same industries ? which are them?)
Country regional characteristics
A) political environment
B) economic environment
C) legal environment
• Endogenous factors ( is about what UK is doing when is going in India )
Experience in managing international operations
(if UK in the past has experience the transfer of an industry from uk to India-examples)
Headquarters international orientation
(EPRG MONTEL-ethnocentric, polycentrism, regiocentrism, geocentrism – where UK BELONGS )
3 DIFFERENCES IN HR PRACTICES-WHICH OF THEM CAN BE TRANSERDED OR NOT
• Importance of HR practices
• Usining these practices (1 recruitment 2 training 3 performance 4 reward)
write which of them can be transfer and which of them cannot and why
(one of them to be connected with the expatriations if this is possible.)
In this report, having as a topic a British high-tech electronics firm that taking over a firm in India, IT will be presenting in the first part for home (United Kingdom) and the host (India) countries, information connected with the major national cultural and institutional characteristics. In order to be analysed, cultural characteristics will be used Hofstede theory and Hall theory. In the second part, there will be prepared the institutional characteristics for both countries. For the third and last part Human Resource Management (HRM) and other employee-related values and practises will be given like the recruitment methods, performance, reward and training. The report will be end with a conclusion, which summarises the theories presented.
Regarding Hofstede centre, the study of Geert Hofstede refers to how culture influences the values in the workplace. Hofstede national culture model is constituted by six dimensions, representing for one state independent preferences. These dimensions are power distance, individualism, masculinity, uncertainty avoidance, long term orientation and indulgence. In this report there will be analysed the first four.
• Power Distance
To start with, the dimension of power distance refers to how the power is distributed within the members of a society. The score of UK is 35 and in India is 77. These rates show that in UK there is no hierarchy and they believe that inequalities have to be minimised, in contrast with India which has a high score for this dimension and it results in a hierarchical structure of society.
This dimension is about the existence of interdependencebetween a society and its members. At 89 UK is considered as an individualistic country with people who take care only for themselves and their families. India is somewhere in the middle with a score of 48 having individualist and collectivistic characteristics. As more collectivistic society, there is the need to belong to larger social groups thinking of the common good and their actions are influenced by their families or other groups for instance in their workplace.
The traits that are connected with this dimension are the high competition leading to achievement and the success from the best in field. The force that motivates people is to be the best on whatever they are doing. The opposite of this dimension is Femininity related with a society that takes care for others, with the quality of life being the main sign that leads to success.UK at 66, and India at 56 are clearly masculine societies focused on success, power, achievements and material gains, having the work the centre of their lives.
• Uncertainty Avoidance
The basic issue for this dimension is how a society treats the fact that the future is not known, if for example it tries to control it or not. UK and India in this dimension have almost the same score, with the first one at 35 and the second one at 40. This means that as nations the ultimate goal for a business is clear but the details on how to achieve it coming in the future according to the changing environment. It means that they are open to innovations, have the need for creativity and they are able to adapt to changes seeing it as a challenge.
Regarding Hall (1976), communication styles is part of culture, and in order to differentiate cultures he designed a separation between high and low context communication. In a high context culture there are contiguous elements and people are able to understand most of the rules, but for someone who cannot understand the unwritten rules it will be confusing. Same of the characteristics in a high context culture are the implicit messages and the use of metaphor, as well as the nonverbal communication-body language. Moreover, there is flexibility of time, and the importance of process is bigger that the product. Concerning people bonds, they are very strong giving great significance to family and community, long term relationships have high commitment and the relationships playing more important role from the task. On the other hand, for low context cultures, there are not many things that are taken for granted, so there is the need for more explanation but less possibility of misunderstanding. The messages are clear and simple, with focus on verbal communication. In addition, there is no flexibility of time and the importance of product is bigger than the process. The bonds among people are breakable and the sense of loyalty is very low. At the end, relationships have low commitment and the task is more important than them. Combining Hofstede theory with Hall theory, it becomes evident that low context cultures relate to individualistic counties while high context cultures relates to collectivist countries. As a result of the above, UK is a low context country since it has all of these characteristics, and India is a high context country.
1. According to Concise Oxford English Dictionary (2002), the institution is defined as an official organisation which plays an important role for countries, connected with educational, religious and social purposes. In most societies common institutions are educational ones, enterprises, public or private, financial establishment, public utilities and trade union. Hall and Soskice (2001), mentioned that there are two types of political economies: liberal and coordinated market economies. In liberal market firms acting on the basis of hierarchies and competitive market adjustments, there is radical innovation and the legal system is formal and complete contracting. For coordinated there are no market relations, there is collaboration, strategic interaction for firms and actors and incremental innovation, having an incomplete and informal contracting legal system. Regarding Hollinshead (2010), both UK’s and India’s business system is compartmentalized (Connected with LMEs). The characteristics of this system are the low rates of cooperation, big companies which embody different courses of action in between the fields, in terms of the links developed in industry and those who own stocks in the companies,a high level of contest and existing conflict when we refer to the areas where commodities and working hands are exchanged and The proprietors of businesses perform their controlling methods at a large distance using two different ways: economic areas of trade and stocks ownership.
HRM values and practices
In this part there will be analysed some of the most important practices of Human Resource Management for UK and India.
Recruitment: The earning of a position in the civil service is becoming with open competition with the proper audits for the ensuring of the established guidance for recruitment. There is also the use of assessment centres for some departments. The vacant positions are considered to reduce expenditure in the context of departmental plans so as the number of working hours per
week to be 37, the leave days per year to be 25, public holidays per year to be 8 and the total number of working hour per year to be 1.667. Moreover, surplus workers pools fill internally some positions.
Performance: The assessment given as an annual feedback for all the staff from the immediate superior with criteria like the quality of outputs, the improvement of competencies, timeliness, skills and cost effectiveness of work. Performance related pay (PRP) is of high importance and it used as permanent pay increments.
Training: The type and the time spent for training is different and it depends on the kind of department. There are investment for at least five days every year for employees to train and develop their skills through e-learning or developing activities or traditional training.
Reward:The base salary is revised every year with the particular ministry, the working experience and the qualifications being the determining factors of this reconsideration.
Training:India has various methods of training, cognitive and behavioural. Cognitive methods give more theoretical training providing rules on how to do something and the scope is to get the right knowledge and attitude. Behavioural methods are more practical and they are used for skill development. (Naukrihub 2015)
Recruitment: these methods are divided in tree basic steps, which are the short listing the Preliminary Assessment and the Final Interview. In some cases there are also written tests. The curriculum vitae and the interview play very important role in the whole process. There is justice and fair and the candidate get informed for the final decision.
Reward: Methods are divided into two periods, before liberalization and after the liberalization. The first period’s systems were determined by internal hierarchy and as a result, they consisted of solely fixed amounts of money which could not vary for anyone regardless of their position. In the post-liberalization era, the approach changed entirely and the reward systems began to be market-based, making the rewards variable, as a result of the external orientation organizations adopted.
Performance: Appraisals can be conducted every year, every six months or every three months and in most cases they do not have the formality of a written feedback, but they are rather expressed as an act of positive (or negative) appraisal like for example a promotion, a bonus (or a warning etc). The wide range of practices regarding employee appraisal makes obvious the fact that subjectivity definitely exists within these decisions or methods, especially in cases where there is not a typical appraisal system in the company and the executive in charge selects the methods that will be applied.
Free MBA Resource (2008)
Taking everything into consideration, in this report was presented the cultural characteristics of UK and India with the use of Hofstede and Hall theory, as well as institutional characteristics for both countries connected with the theory of Hall and Soskice. Subsequently, some of the Human Resource practices were analysed like the recruitment, performance, reward and training as well making evident the differences between these countries. Although the report analysed this aspects further research needs to be done for an in-depth analysis of the countries.
Concise Oxford English Dictionary(2002), Oxford: University Press
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Hall, P. A., & Soskice, D. (2001). Varieties of Capitalism. The Institutional Foundations of Comparative Advantage. Oxford: Oxford University Press.
Hall, E.T. (1976) – ‘Beyond Culture’. New York, Doubleday
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Hollinshead, G. (2010). International and Comparative Human Resource Management. Maidenhead: McGraw-Hill Education.
Lakshman C. (2015), ‘Doing Business in India’, Elsevier, Oxford
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OECD (2012), Human Resources Management Country Profiles-UK, Available from:
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