The Impact of Culture on Human Resource Management Practices: An Empirical Research Finding in Indonesia
The objective of the study is to investigate and analyze the influence of culture on human resource management practices. The research is expected to answer the importance question: Are HRM practices influenced by national culture or not? It is generally accepted that the practices of management is considered to be universal until Hofstede (1980:42) published the seminal work: Culture’s Consequences: International Differences in Work Related Value in 1980. Hofstede’s work is the most popular in cross culture management studies so that his framework in national culture will be used in this research. The research was done by using the survey method. The respondents were 108 managers of HRM from the listed companies of Jakarta Stock Exchange 2007. Structural equation model (SEM) with Two Step Model Building Approach is used to test structural theory. It is used to test the hypotheses model statistically to determine the extent to which the proposed model is consistent with the sample data. SEM incorporates both confirmatory factor analysis and multiple regressions to estimate a series of interdependent relationship simultaneously. The results of descriptive analysis indicate that the national culture dimensions tend high for collectivism, power distance, masculinity and uncertainty avoidance, quite different from Hofstede (1980) findings that Indonesia has high collectivism, high power distance, moderate in masculinity and low in uncertainty avoidance. While in Second Order Confirmatory Factor Analysis, collectivism, power distance and uncertainty avoidance are confirmed as a dimension of national culture but masculinity are not. In structural testing, it indicates that two hypotheses i.e. the influence of national culture on career development and compensation are supported but the influence of national culture on staffing and participative management are not supported. Organizational culture also shows influence on staffing and participative management. One of human resource management practices i.e. career development influence on organizational performance but others such as staffing, participative management, and compensation does not. This study shows that national culture and organizational culture influence on some of human resource management practices. Therefore, this research supports the divergence theory that human resource management practices are culture-bound.
Since more than two decades ago, a number distingusihed management and social scientists questioned the applicability of Western, especially American managemenet theory abroad (Hofstede, 1980, Laurent, 1986). Hofstede, for example, argued that American management theories reflect the cultural environment in which they were written. Therefore, it can be concluded that American management can not be separated from American cuture. Meanwhile, Laurent (1986:91) stated that:“a comparative analysis across national culture brings the startling evidence that there is no such thing as Management with a capital M. The art of managing and organizing has no homeland. In additions, Laurent (1986:92) said that every culture has developed through its own history some specific and unique insight into the managing of organization and their human resources. Every culture has also developed specific and unique blindspots in the art of managing and organizing. The lie the still largely undiscoverd opportunities and threats of international management. By using Hofstede’s framework of national culture, the objective of research is to investigates and analyzes the impact of national culture on human resource practice. Besides, this research aimes at discerning the impact of Indonesian culture on the organizational performance....