Institutional and Cultural Perspectives

Topics: Capitalism, Geert Hofstede, Economics Pages: 21 (5924 words) Published: July 2, 2011
Despite the all pervasive talk of globalization, the seasoned international business traveler will be acutely aware of differences in the ‘way of doing things’ from country to country and from region to region. Such differences are seldom more apparent than in the field of organization and management. Not only will this traveler be aware that conventions for doing business are culture- bound, but also that systems and structures for ‘the management of people’ are uniquely determined by forces of tradition. If the business traveler were to discuss the issue of fairness of pay with a Japanese worker, the latter could well re-iterate the proverb ’The nail that sticks out should be hammered down’, thus stressing the need for egalitarianism and group compliance. The counterpart of this worker in the US however, particularly if a high performer, may well be peeved if his or her superior contribution to enterprise success is not individually recognized in financial terms. Similarly, as the recent case of the highly contested closure of the Paris branch of UK. owned retailer Marks and Spencer demonstrated. French employees’ expectations of job security (and consultation in the case of job loss) are considerably higher than those of their British counterparts. It is the purpose of this unit to assist understanding as to why observed manifestations of HR and employment practices demonstrate distinctiveness and ‘embeddedness’ within specific geographic territories. We will pursue two complementary lines of theoretical explanation, the first relating to institutional arrangements, which may be regarded as the ‘hardware’ of underlying systems for HRM, and the second concerning cultural stereotypes, which, continuing the metaphor, relate to the more intangible and psychological determinants of international diversity.

Institutional perspectives
According to the Oxford English Dictionary (2002) an institution may be defined as ‘an official organization with an important role in a country’ or ‘an organization founded for a religious, educational or social purpose’. Although a common set of institutions can be found in most societies, including industrial enterprises, public utilities, financial establishments, educational institutions, trade unions and government / quasi- governmental agencies, the relative strength of these institution scan vary, as can their overall configuration at a societal level, or the manner in which they interact. Dore (2000:45-47) refers to ‘institutional interlock’ as typifying national economies and the relationship between the economy and the broader society.  Thus, it may be argued that in some societies, as a result of socio/ political traditions, institutions operate in an interlocking, mutually supportive fashion, while in others, there exists a greater ‘space’ between key institutions, and an emphasis on institutional autonomy and self- support.  For the purpose of this analysis various complementary institutional perspectives will be offered. Firstly, broad policy prescriptions concerning the role of the state and related institutional arrangements will be explored. Secondly, variations in ‘business systems’ from region to region depending primarily on patterns of ownership will be examined Thirdly, insights will be provided into the ‘clustering’ of institutional factors to contribute to the competitive advantage of nations.

Neo- liberalist, neo- corporatist and socialist/ Marxist perspectives Current debates and controversies relating to globalization and, more generally, to the way in which economic systems should be ordered, are invariably based upon ideologies which present a general plan of action for structuring economic and social orders. Such plans, which may emanate from politicians, policy makers, academics, management consultants and the like, are seeking to prescribe ideal forms of institutional states of existence to guide macro level reforms.  For our purposes three...
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