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Developing a Culturally

Synergistic Approach to

International Human Resource

Management

Maddy Janssens

This paper offers international human resource (IHR) professionals guidelines how to decide which IHRM approach to choose. In choosing among an adaptive, exportive, or integrated IHR approach, IHR managers may want to consider three decision criteria, e.g. forces for global integration and local adaptation, the cultural component of HRM, and the power dynamics within the MNC. To develop an organization that values cultural differences, IHR professionals may choose a culturally synergistic approach to IHRM. This approach has the potential of designing new combinations of HRM practices and simultaneously attends to the three decision criteria.

A

large U.S. based company

ac-quired several years ago a small, successful Belgian company. While headquarters (HQ) initially managed the merger in a very decentralized ap-proach, they recently moved towards a more centralized approach. It was the strong belief of the company’s president that the global world has no geograph-ical boundaries, which led to the imple-mentation of several uniform policies, not only in the core domain of R&D but also, in the area of human resource management (HRM). An example here

was the corporate message that turnover in the Belgian plant was too low. It was HQ’s belief that a dynamic and result-oriented company has a turnover of ap-proximately 15%. Because turnover in the Belgian affiliate was even lower than 5%, the Belgian HR department was informed about the following deci-sion. They had to work out a perfor-mance appraisal system with forced choice to weed out the bad performers. All employees had to be evaluated dur-ing the followdur-ing year and the evalua-tion scores needed to reflect a Gauss curve. Those employees who had the lowest scores were presented with a choice: improve or be fired. The Bel-gian HR team hired a consultancy orga-nization to implement the appraisal

pro-Dr. M. Janssens, Katholicka Universiteit Leuven, Dept of Applied Economic Sciences, Naame-sestraat 69, 3000 Leuven, Belgiummaddy.janssens@econ.kulewven.ac.be.

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cess. The results of this international HR decision were anxiety among most of the Belgian employees, an intensifi-cation of rumors and an increase in un-certainty about the position of the Bel-gian unit within the whole company.

This story indicates one of the major questions of international HRM: when to impose HR policies and when to adapt them to the local context? The story further illustrates the negative consequences when HQ doesn’t con-sider the cultural component of a HR practice or when they are not sensitive to the power position of an affiliate. Therefore, the purpose of the paper is to provide HR practitioners with guide-lines of how to decide when to adapt and when to impose, as well as how to implement a culturally synergistic ap-proach. We develop these guidelines by first synthesizing the different theoreti-cal models of strategic international HRM. From these models, three differ-ent approaches to IHRM can be iddiffer-enti- identi-fied: an exportive, an adaptive and an integrative approach. We discuss these three options, with its different advan-tages and disadvanadvan-tages. To decide which IHRM approach to choose, we present three criteria that drive the de-cision: local versus global forces, the cultural component of HRM practices, and power dynamics. We discuss why and how these three criteria may help the decision making process and then apply them as guidelines to the Belgian case. In the second part of the paper, we introduce a culturally synergistic ap-proach to IHRM. Based upon the mod-els of cultural synergy (Adler, 1997; Hoecklin, 1995) and problem solving (Schein, 1999), we first discuss how this

approach has the potential of designing new combinations of HRM practices in-stead of only transferring best practices from HQ to affiliates and vice versa. We further develop this IHRM ap-proach by identifying its different steps and formulating guidelines of imple-mentation. A culturally synergistic ap-proach offers the potential of consider-ing simultaneously the need for global integration, the cultural embeddedness of HRM practices and the importance of the affiliates’ power and autonomy. Its purpose is to support IHR managers in developing an organization that values differences.

HOW TO DECIDE ON IHRM? OPTIONS AND CRITERIA

Which Options Do IHR Managers Have?

In developing guidelines on how to decide on IHR policies, we start from the models of strategic international hu-man resource hu-management (SIHRM). This work (Adler & Ghadar, 1990; Evans & Lorange, 1989; Milliman, Von Glinow & Nathan, 1991; Schuler, Dowling, & De Cieri, 1993; Taylor, Beechler, & Napier, 1996) has mainly taken a macro, strategic perspective fo-cusing on the determinants of SIHRM systems in a multinational company (MNC). The early models focused pri-marily on strategy as the main factor, arguing that the central issue is not to identify the best HRM policy per se, but rather to find the best fit between the MNC’s overall strategy and its HRM policy (Adler & Ghadar, 1990;

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Milli-man et al., 1991). More recent models have specified other internal as well as external factors to explain MNCs’ choices of IHRM systems. In addition to strategy, the different determinants of IHRM seem to be the industry in which a MNC is operating (Schuler et al., 1993), the MNC’s international life cy-cle and experience (Adler & Ghadar, 1990; Milliman et al., 1991; Schuler et al., 1993; Taylor et al., 1996), the orga-nizational structure (Schuler et al., 1993), the HQ’s international orienta-tion (Hedlund, 1986; Schuler et al., 1993; Taylor et al., 1996), the host country’s cultural and legal environ-ments (Adler & Ghadar, 1990; Milli-man et al., 1991; Schuler et al., 1993; Taylor et al., 1996), and the resources or strategic role of affiliates and certain employee groups (Taylor et al., 1996).

In one of the most recent SIHRM models, Taylor and colleagues (Taylor et al., 1996) have identified three differ-ent SIHRM oridiffer-entations in MNCs: adaptive, exportive and integrative. These orientations determine the com-pany’s overall HR approach to manag-ing the tension between integration or the pressure for internal consistency and differentiation or the pressure for exter-nal consistency. An adaptive SIHRM orientation is one in which each affiliate develops its own HRM system, reflect-ing the local environment. Differentia-tion is being emphasized with almost no transfer of HRM philosophy, policies or practices either from the parent firm to its affiliates or between affiliates (Tay-lor et al., 1996). The major advantage of such an approach is that HRM systems may be completely in tune with their local context. However, when each

af-filiate determines its own HR policies, disadvantages may occur. There may exist a lack of coherence within the MNC if, for instance, different perfor-mance criteria are considered in the em-ployees’ appraisal in different affiliates. Because each HR department is focused on its own context, there may be also a duplication of efforts with no attention to economies of scale or synergies in terms of learning from each other. Each affiliate will have spent time and re-sources to design a HR policy without having consulted other HR managers for best practices.

The second, an exportive SIHRM ori-entation is one in which the parent firm’s HRM system is being transferred to its different affiliates. This approach emphasizes integration across all affili-ates, developing a highly internal con-sistent MNC (Taylor et al., 1996). How-ever, the downside of such an exportive IHRM approach is its inflexibility, ig-noring the possible local differences, and therefore having missed opportuni-ties with respect to learning. This all may lead to an ethnocentric orientation from HQ and as a consequence, affili-ates will show feelings of rejection to-wards the imposed practice.

The third, an integrative SIHRM ori-entation attempts to take ‘the best’

HRM approaches and uses them

throughout the organization in the cre-ation of a worldwide system. The focus here is on substantial global integration with an allowance for some local differ-entiation. An integrative approach com-bines both characteristics of the parent company’s HRM system with those of its international affiliates. Transfer of HRM policies and practices occurs and

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can go in any direction, from one affil-iate to HQ or between affilaffil-iates and vice versa (Taylor et al., 1996). While the advantage of this approach seem to be the spreading of good practices, the ma-jor disadvantage is that a so-called best practice may still be ill suited for a particular context.

The three orientations of an adaptive, exportive or integrative approach repre-sent three basic choices for IHR man-agers, reflecting an overall approach to-wards IHRM. However, in practice, IHR managers may have the option to choose for a mix of the three approaches. Because the IHR function consists of sev-eral tasks and is oriented towards differ-ent types of employees, choices may dif-fer for the difdif-ferent tasks or employee groups. For instance, Luthans and col-leagues (Luthan et al., 2001) advice IHR managers to set up a contingency matrix for IHRM. The horizontal row of the ma-trix represents the different sample of HR tasks such as recruitment and selection, training, compensation, labor relations, and job design. Along the vertical col-umns, the different countries of the MNC are being placed. The pragmatic value of such a matrix is that it can be used to organize the existing body of knowledge and experience and to constantly remind IHR professionals that different HR tasks may require different choices for different countries.

IHR professionals may also decide dif-ferently with respect to certain employee groups. When HR practices are designed for higher and senior level managers, they will probably encounter a need for con-sistency worldwide, either by exporting the HQ’s approach or by an integrated approach. For instance, the question of

how to develop global managers seems to lead to an integrated HR approach for this employee group. Many companies em-phasize that their senior managers must not only possess technical skills but also need to have a broad understanding of history, culture, sociology, and human re-lations. Consequently, the selection crite-rion often set for this employee group is global awareness or global mindset, refer-ring to an openness to other cultures, mul-tiple language skills, tolerance and flexi-bility (Harris & Morran, 2001). Another example refers to training & develop-ment, which may differ for higher and lower level managers. UCB, a Belgian company in the film, chemical and phar-maceutical industry, developed its own ‘global leadership program’ for its higher level managers. Its purpose is to broadly develop these managers by offering ex-pertise in different functional areas as well as intercultural communication and negotiation skills. Corporate HR further decided that the 3-week program takes place in Asia, North America and Europe, the three regions in which the company is active. Moreover, they selected trainers coming from these different areas as well as local experts from each region to dis-cuss its cultural, political and socio-economic context. While this program for higher level managers reflects an integra-tive approach, training, and development for lower level managers reflects an adap-tive approach with local HR managers being responsible for this HR task.

Which Criteria Drives the IHRM Decision?

After having identified the different options of IHRM in terms of an

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adtive, exportive and integrative ap-proach, the next question is how to

de-cide which option to choose. In

examining the different SIHRM mod-els, two factors seemed to be crucial. In all models, there is the postulated need for an SIHRM system to address the tension between the dual imperatives of global integration and local responsive-ness (Bartlett & Ghoshal, 1989). We therefore include global and local forces as a first criterion of how to decide. The second crucial factor in almost all SI-HRM models is the cultural context of HQ and its different affiliates, which brings us to a second criterion, for ex-ample, the cultural component of HRM. While these two criteria serve as guide-lines to decide on the most effective IHRM practice given the contextual fac-tors, we add a third criterion that takes into account the power dynamics within the MNC. This criterion is crucial be-cause the type of relationship between HQ’s and affiliates will influence to a great extent the acceptance of the decision by the affiliate HR managers. We will now discuss these three criteria more in-depth and then illustrate the relevance of these criteria by applying them to the story of the Belgian affiliate.

Global versus Local Forces

A first criterion in deciding on an adaptive, exportive, or integrative ap-proach refers to the different global and local forces operating in the MNC. While global forces refer to the need for integration or interunit linkages, local forces refer to the need for responsive-ness or differentiation of each affiliate to operate effectively in its local

envi-ronment. Examples of these forces are most of the critical determinants of the SIHRM models. We limit our discus-sion here to the following factors: MNC’s strategy, top management’s be-lief, the international life cycle of MNC and affiliates, the strategic role of cer-tain employee groups, and the legal en-vironment. The purpose of this discus-sion is to indicate how these factors may affect the decision of which op-tions to chose. For a more complete discussion of possible global versus lo-cal forces, we refer to the different SI-HRM models (see Taylor et al., 1996 for a review).

IHR managers may want to start ex-amining the degree to which the MNC’s

strategy itself is favoring global

integra-tion or local differentiaintegra-tion. Following Porter’s (1986) two generic MNC strat-egies of multidomestic and global, Tay-lor and colleagues (TayTay-lor et al., 1996) propose that MNCs who follow a mul-tidomestic strategy are more likely to adopt an adaptive orientation. On the other hand, MNCs who follow a global strategy are more likely to adopt an exportive or an integrative approach. The reason is that a multidomestic strat-egy places primarily demands of local adaptation and as a consequence the MNC consists of relatively independent affiliates. This strategy will be sup-ported by an adaptive IHRM system reflecting the different local environ-ments. On the other hand, a global strat-egy requires a high level of coordina-tion and control of activities (Bartlett & Ghoshal, 1989; Rosenzweig & Singh, 1991). This strategy may favor an ex-portive HRM system across all affili-ates, which will help integrating.

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How-ever, MNCs following a global strategy may also choose to adopt an integrative approach. Despite the drive towards in-ternal consistency, local forces are also present which may lead to the decision to be simultaneously globally integrated and locally responsive. When differ-ences in the local environment create the need for differentiation, IHR profes-sionals may want to decide on allow-ance for local differentiation. One of the most influential factor of these local forces is the legal environment of the affiliates which will force a MNC to adapt certain HR practices to the local labor laws (see below). Besides allow-ance for local differentiation, IHR man-agers may decide on the choice of trans-ferring best practices across affiliates and HQ. Factors that are likely to affect this decision are top management’s be-lief and the international experience of the MNC.

Top management is a key factor in

determining the overall international strategy and its implementation ap-proach (e.g., Roth, 1995). Their belief in the generalizability or specificity of policies and practices is a driving force of MNC’s choices (Hedlund, 1986; Heenan & Perlmutter, 1979). For exam-ple, Interbrew, a Belgian brewery fol-lows the multidomestic strategy of the ‘World’s Local Brewer’ and conse-quently adopts mainly an adaptive HR approach. However, a former CEO of this company— coming from a French company in a global industry—strongly believed in centralized decision making and decided on an exportive approach in all areas. With respect to HRM, HQ was responsible for recruitment and se-lection in the affiliates, and a global

corporate culture program was in-stalled. Afterwards, an IHR manager described the consequences of this cen-tralized approach as a dramatic increase in overhead costs, a slow decision mak-ing process, heavy workload at HQ and promotion based upon visibility in HQ. Two years later, the company decided again on the decentralization of sales, administration and HRM. In contrast, Doug Daft, the current CEO of Coca Cola, strongly believes in a localized approach. In recent interviews in Euro-pean newspapers, he strongly expresses the importance of ‘thinking locally and acting locally,’ being sensitive towards the local environments. Although the company is operating more in a global market, the CEO’s belief seems to move the company away from an ex-portive approach to an adaptive one. As a first powerful signal, the European affiliates are not led anymore by U.S. expatriates but by home country nation-als. Other CEOs may believe in an in-tegrated approach or the transfer of best practices across the whole company. For instance, the integrative nature of the ‘global leadership program’ of UCB was strongly supported by the CEO of the pharmaceutical division. He be-lieves that ‘size and innovation come from exploring cultural diversity’ (Jans-sens, Keunen, & Brett, 1998) which instigated corporate HQ to emphasize intercultural communication and nego-tiation skills, to select international trainers, and to rotate the training pro-gram across different regions.

Another important factor to consider is the life cycle of the MNC and its

affiliates, and consequently their

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man et al., 1991; Schuler et al., 1993; Taylor et al., 1996). Newly internation-alizing companies may choose to adapt an exportive approach. Their belief in their product and management practices or the high level of uncertainty may lead them to use their own practices at the outset (Rosenzweig & Singh, 1991). As MNCs gain more experience, they will receive feedback about the appro-priateness of their approaches and may change their policies. For example, MNCs that encounter performance problems in international affiliates will usually move towards a more adaptive IHRM approach over time (Taylor et al., 1996). Or MNCs that encounter good practices developed in affiliates may move towards an inte-grated approach.

Not only the life cycle and experi-ence of the MNC as a whole but also that of specific affiliates is an important factor to consider. Newly acquired af-filiates or green fields still need to be integrated into the MNC, which may favor the choice of an exportive ap-proach. For example, British American Tobacco sent a Belgian HR manager for a temporary assignment to its new af-filiate in Hungary. His task was to set up and monitor the selection procedure for new hires. According to him, it was a first step in assuring the transfer of the company culture and socializing the Hungarian employees. As illustrated in this example, an exportive approach is often accompanied by sending out ex-patriates. However, an exportive ap-proach may also consist of transferring people from affiliates to HQ. For exam-ple, Bekaert, a Belgian steel company with affiliates in China, trains Chinese

employees in HQ. During their time in Belgium, Chinese employees are ap-pointed to Belgian colleagues perform-ing a similar function. The trainperform-ing consists of following their Belgian col-leagues as they perform their job—it is called a ‘shadowing job.’ According to the corporate IHR manager, the advan-tage of this approach is a greater will-ingness of the Chinese employees to adopt the HQ’s approach and proce-dures, and the development of a per-sonal network which makes it easier for Chinese employees to contact HQ when they are in China confronted with prob-lems or questions.

Another factor to consider is the

stra-tegic role of certain employees’ groups.

Taylor and colleagues (Taylor et al., 1996) propose that an exportive ap-proach will be adopted for the group of employees who are most critical to the MNC’s performance. Because their contribution is critical, they will expe-rience a higher level of control. For example, although Interbrew adopts mainly an adaptive IHRM approach, they opt for an exportive approach with regard to training for employees in tech-nical brewer functions. Because compe-tences related to the brewing process are considered to be the core compe-tence of this 14th century old brewery, they need to be transferred across all affiliates. In contrast, training programs for other functions such as marketing and sales are locally decided.

While limited experience of the MNC and its affiliates as well as the strategic role of certain employee groups all indicate the need for control and integration, a very important force towards local differentiation is the legal

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environment of the affiliates. IHRM

systems will evidently need to take into account specific country laws with re-gard to labor relations, hiring and firing, compensation or other HR tasks. For example, social inspection in France is increasingly controlling companies to ensure that the effective working hours of higher level managers don’t exceed the legal working hours per week. Or in Belgium, the government decided in 1994 on a ‘stop in pay increases’ to control labor costs which forbid compa-nies to offer salary increases. These two examples illustrate how local laws are not only restricted to lower level em-ployees, as sometimes assumed, but may set important conditions to the management of higher level employees. So, a first challenge for IHRM pro-fessionals is assess the different forces that instigate the need for global inte-gration and local responsiveness. Forces that seem to indicate a need for

company-wide coordination are a

global strategy, top management who believes in generalizability, less experi-ence of the MNC, newly acquired affil-iates or greenfields, and the critical role of certain employee groups. While these forces indicate a need for control and integration, there is still the ques-tion whether the coordinaques-tion is im-posed by HQ, an exportive approach, or whether coordination is achieved by transferring local best practices across the company, an integrative approach. Two forces that seem to differentiate between these two IHR approaches are top management’s belief and MNC’s experience in learning from different practices. In contrast, forces that indi-cate a need for local adaptation are a

multidomestic strategy, top manage-ment who believes in context-specific practices, feedback from affiliates, and the legal environment.

The Cultural Component of HRM

The cultural context of HQ and the different affiliates is another crucial fac-tor, mentioned in almost all SIHRM models (Adler & Ghadar, 1990; Milli-man et al., 1991; Schuler et al., 1993; Taylor et al., 1996). While this factor can be considered to be one of the local forces, we discuss the cultural compo-nent of IHRM separately. We do so because culture is considered to be the main reason that the same HRM poli-cies are not producing the same effects in different affiliates (Schneider & Bar-soux, 1997).

Differences in cultural values reflect different assumptions about the nature of the relationship between employers and employees and therefore lead to different interpretations and employees’ experiences of what ‘good’ HRM prac-tices are. Consequently, cultural differ-ences are main drivers in deciding which HRM practices can be globally used and which HRM practices need to be locally adjusted. For example, prac-tices with respect to selection, socializa-tion, training, performance appraisal, reward systems and career development may all be experienced differently in individualistic than in collectivistic cul-tures (Hofstede, 1980). The policy of not hiring family members, for instance, may be completely accepted by people coming from an individualistic culture. Because it is the capability of the indi-vidual person that will drive the

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selec-tion decision, any other possible factors leading to biased decision making are being eliminated. In contrast, people from a collectivistic culture may expe-rience this HR policy as ‘strange’ be-cause in-group members are likely to be more trusted and will show more loy-alty. Therefore, IHR managers need to ask themselves questions about the appropriateness of HR practices: Who to hire? What kind of socialization practices is acceptable? What deter-mines career success? How important is individual versus team effort and result? Such questions are very likely to be answered differently in different cultures.

So, a second challenge for IHR man-agers is to understand the different cul-tural assumptions embedded in HRM policies and evaluating their likely im-pact. Being able to assess the cultural context is crucial in deciding which HR policies can be globally exported and which need to be locally adapted. It is a vital step in avoiding the possible alien-ation or low morale which comes from imposing HR policies that are ill-suited to the local culture (Schneider & Bar-soux, 1997).

The Political Component Because of Power Dynamics

While the global and local forces and the cultural component are criteria that help to decide whether an adaptive, ex-portive, or integrative approach is effec-tive, this third criterion of political com-ponent focuses on the acceptability of the decision by the affiliates. It may happen that the decision is strategically correct from a HQ’s perspective but that

the different affiliates have another opinion about its need or relevance. A challenge for IHR professionals is therefore to be sensitive to the power dynamics and understand feelings of re-luctance.

This awareness of the political dy-namics brings us to the importance of the process of decision making. Follow-ing Kim and Mauborgne (1993), affili-ate managers will be more inclined to accept a HQ’s decision if HQ shows familiarity with the local conditions, if a two-way communication process is set up, if affiliate managers have the ability to refute a decision or receive an expla-nation for the final decision, and if de-cision making is consistent across affil-iates. When decisions are being made with understanding of the effects and impacts for that affiliate, affiliate man-agers will judge HQ to be competent and sincere. Consequently, those deci-sions will be more respected. Affiliate managers will also value the ability to voice their opinion and work back and forth with corporate HR in decision for-mulation. If a two-way communication process is not possible, at least they need to be able to point out possible misperceptions or wrong assumptions made by HQ concerning local condi-tions or operacondi-tions. Explaining final de-cisions is further important because an intellectual understanding of the ratio-nale makes affiliate managers more in-clined to implement those decisions. Fi-nally, affiliate managers appreciate a consistent application of decision-making rules across affiliates. Other-wise, they think that the whole process is just a scam, a political arena where strategic decisions reflect not

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competi-tive and economic dynamics but the dy-namics of political interplay (Kim & Mauborgne, 1993). These guidelines may help corporate HR managers to make decisions about international HR practices as fair as possible.

However, even with attention to the decision making process, it is very likely that corporate HR will experience resistance and reluctance towards their decisions. The reason lies in the mere fact that each party wants to reserve the power and autonomy to do things as they see fit. It is also for this reason that an exportive HR approach is very likely to lead to feelings of rejection, as indi-cated before. So, the discussion of the need for local adaptation is likely to hide a political subtext. In addition, it is often cultural differences that affiliate managers point to as the main reason for local adaptation. Comments such as ‘but that will never work here in Bel-gium’ are then used as an excuse, a pretext for retaining local control. The advice from Schneider and Barsoux

(1997) is to approach such comments as subjects for dialogue rather than accept them as a given. So, a third challenge is to correctly assess the underlying polit-ical concerns that may influence the dis-cussion of where integration is possible and where local responsiveness is needed.

To conclude, IHR managers may want to consider three types of criteria when deciding on an IHR practice. First, they may want to examine the different local and global forces leading to a judgment whether these forces ask for local variation, for HR policies to converge, or for global diffusion of best practices. Second, IHR managers need to understand the cultural embedded-ness of HR practices to evaluate their likely impact. Table 1 gives an over-view of these different conditions lead-ing to an adaptive, exportive or integra-tive IHRM approach, as well as the advantages and disadvantages of each approach. Finally, IHR managers need to be sensitive to the political concerns Table 1

International Human Resource Management Approaches

Adaptive Approach Exportive Approach Integrative Approach Conditions A multidomestic strategy A global strategy A global strategy

Top management’s belief in context-specific practices

Top management’s belief in generalizability

Top management’s belief in sharing experiences Negative feedback about the

appropriateness of exportive practices

First stage of internationalization

Encountered good practices in affiliates

Legal environment For newly acquired affiliates or greenfields

Differences in cultural values For strategic critical groups of employees

Advantages Localization, adaptability Standardization, internal consistency

Spreading of good practices Disadvantages Fragmentation, duplication of

efforts

Inflexibility, feelings of rejection

Ill-suited for a particular context

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of the affiliates to make the decision acceptable.

Assessing the IHR Decision in the Belgian Case

To illustrate the relevance of the de-veloped guidelines, we apply the three different types of criteria to the IHR decision in our original story. As the story indicated, a U.S. MNC adopted an exportive approach, imposing an ap-praisal system reflecting a Gauss curve on the Belgian affiliate to ensure a dy-namic and result-oriented company. Ex-amining the first criteria of assessing global and local forces, it seemed mainly the CEO’s belief in a boundary-less world that drove this decision. In general, the company moved into the direction of an uniform approach apply-ing the same policies for all affiliates. In the area of HRM, HQ believed that a turnover of 15% was the signal of a dynamic and result-oriented company and affiliates with a lower turnover were forced to use an appraisal system weeding out bad performers. Although the IHR practices supported top man-agement’s belief in the transfer of uni-form practices, the cultural and political component of this decision can explain why this IHR decision was leading to negative reactions.

The belief in the relationship between a 15% turnover and a dynamic, effec-tive company is not free from cultural values. While this may apply in the U.S. context, employment relationships in Belgium are characterized by a psycho-logical contract of high loyalty, low exit. On average, 96% of employees stay in their same job position, an

esti-mation that confirms the preference of Belgian employees for job stability and security. Also most Belgian employers favor long-term relationships offering in general long term, open-ended con-tracts (Sels, Janssens, Van den Brande, & Overlaet, 2000). Such a high company-employee bonding makes a turnover of 5% very acceptable. Given this cultural context, it is understand-able that a performance appraisal pro-cedure with a threat of lay-offs is a violation of psychological contracting in Belgium and leads to negative reac-tions among Belgian employees.

Besides the cultural component, the resistance towards the IHR decision can be further understood by the power dy-namics within the MNC. The Belgian affiliate considered itself as a local in-novator and therefore claiming an im-portant strategic role within the whole company. The expected freedom and influence coming along with this strate-gic position was consistent with the de-centralized management approach of the past. However, the recent central-ized approach was a threat for the au-tonomy and control of the Belgian af-filiate, which in it was leading to feelings of rejection towards HQ. In addition, this specific IHR decision was unilaterally made by HQ with no possi-bilities for input from affiliates or an explanation from corporate HR why and how a dynamic and result-oriented workforce was linked to the company’s strategy and/or culture. Of course, one can question whether a two-way com-munication process or a discussion about the cultural appropriateness of the performance appraisal procedure would have removed all negative reactions.

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Given the changing power dynamics within the MNC, it may be very likely that the Belgian HR managers would have used culture as a reason for devel-oping its own system, claiming at that moment also back their autonomy.

DEVELOPING A CULTURALLY

SYNERGISTIC IHRM APPROACH

Although IHR manages can theoreti-cally choose among three options: an adaptive, an exportive and an integra-tive IHR approach, the discussion above indicates that MNCs are con-fronted with the challenge of simulta-neously considering global integration and local adaptation. So, a pure

expor-tive or adaptive IHRM approach

doesn’t seem advisable to choose. Among the three options, it is the inte-grative IHRM approach that focuses on substantial global integration with an allowance for local differentiation. In this approach, the balance is being achieved through transferring best prac-tices between HQ and affiliates. How-ever, we would like to develop an ap-proach that designs new combinations of HR practices, instead of only trans-ferring best practices. This approach, a culturally synergistic approach to IHRM, is rather ambitious because it tries to seize the opportunity of mutual dialogue to experiment with creative variations. To develop this IHRM ap-proach, we first rely on existing models of cultural synergy in which new out-comes or solutions come from explor-ing cultural diversity (Adler, 1997; Ho-ecklin, 1995) and on Schein’s (1999) process model of problem solving.

Models of Cultural Synergy and Problem Solving

The idea of cultural synergy refers to the creative potential of cultural differ-ences, leading to new solutions and ap-proaches that transcend the existing dif-ferences. According to Adler (1997: 108): “culturally synergistic organiza-tions reflect the best aspects of all mem-bers’ cultures in their strategy, structure and process without violating the norms of any single culture.” Synergies are the benefits resulting from a decision that integrates differences and creates a res-olution that has more value and benefits than would be produced by a compro-mise solution. This idea of cultural syn-ergy can be found in the work of both Adler (1997) and Hoecklin (1995). The difference between the two models seems to be mainly the first step. While Adler takes a problem-solving approach to cultural synergy, Hoecklin adopts a value-added perspective to cultural syn-ergy.

Adler’s (1997) synergistic approach to problem solving involves three fundamental steps: (1) describing the situation, (2) culturally interpreting the situation, and (3) developing new cul-turally creative solutions. Managers first define the problem to be solved from the perspectives of all cultures in-volved. Once they recognize the prob-lem, they culturally interpret the situa-tion by analyzing and explaining the patterns that make each culture’s behav-ior logical from within its own perspec-tive. Third, they develop new culturally creative solutions that foster the organi-zation’s effectiveness and productivity without violating the norms of any

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cul-ture involved. After implementation, managers refine the solution based on multicultural feedback. An example of this approach is a conflict between American and Japanese sales represen-tatives in a U.S. company. While the American sales representatives want to promise their customers specific deliv-ery dates and hours, their Japanese col-leagues often refuse to promise delivery times. A synergistic solution, which as-sures that neither style is treated supe-rior to the other, would be promising delivery within a range of time rather than at specific times. This solution ad-dresses both the American concern of developing credibility with American customers and the Japanese concern of keeping promises (Adler, 1997).

Hoecklin’s perspective on cultural synergy (Hoecklin, 1995) is proactive-oriented. She argues that managers from each culture must jointly work through the following steps to consider the value of culture at the start of a working relationship: (1) agreeing on the specific outcomes that are desired from the interaction; (2) understanding each culture’s way of doing things in trying to achieve the outcome; (3) agreeing to an approach by creating new alternatives or blending approaches which will lead to achieving the desired outcomes; (4) implementing the solu-tion and reviewing the impact from a joint perspective; and (5) refining the solution based on multicultural feed-back. For instance, in the case of a joint-venture, a team of British and Jap-anese managers agrees upon the objec-tive of a ‘team spirit/equal status’ cul-ture. For several practices such as conducting meetings, reviewing

perfor-mance and type of work clothes, they discuss their different approaches and negotiate the most effective way of en-suring the desired outcome. The result is a combination of practices reflecting both the English culture that is more attuned to individual performance and the consensual Japanese way of work-ing.

While these two models of cultural synergy offer us the basic steps of a culturally synergistic approach to IHRM, we further draw upon the prob-lem solving model as discussed by Schein (1999). Schein’s process model distinguishes two basic cycles of activity— one that occurs before to any decision or action, and one that occurs after a decision to act has been taken. The first cycle consists of three stages: (1) problem formulation, (2) generating proposals for action, (3) forecasting consequences of proposed solutions and testing proposals. This cycle ends when the group has made a formal decision on what to do. The second cycle then involves (4) action planning, (5) action steps, and (6) evaluations of the out-comes, often leading back to the first cycle with problem redefinition. For each of these stages, Schein (1999) dis-cusses the different task processes in groups and provides guidelines on when and where to intervene in a group to avoid common traps.

Our next step is to translate the steps and insights from these existing models into a culturally synergistic approach to IHRM. Because this approach will be realized at the operational level by workshops, seminars, and structured meetings, we further rely upon studies on multicultural teams (Adler, 1997;

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Janssens & Brett, 1997; 2000). Insights on the way multicultural teams function will help us to identify practices that facilitate the inclusion of the different cultural perspectives.

A Culturally Synergistic Approach to IHRM

The culturally synergistic IHRM ap-proach, as presented in Figure 1, con-sists of 7 steps: (1) felt need for an integrated IHRM practice, (2) develop-ing a superordinate goal, (3) explordevelop-ing best practices of different cultures, (4) assessing the cultural appropriateness of solutions, (5) decision making by con-sensus, (6) taking action steps, and (7)

evaluating the outcomes of the action steps.

1. Felt Need for an Integrated IHRM Practice

The approach starts with the first step of explaining the felt need for an inte-grated IHR practice. This is crucial be-cause, although the decision to coordi-nate may be strategically correct from a HQ’s perspective, the different affiliates may question the need or relevance of an integrated IHRM practice. As al-ready discussed under the political com-ponent of IHRM, corporate HR

manag-ers may overcome feelings of

reluctance by involving local HR man-agers in the development of the inte-grated plan or at least by giving them an explanation for the decision. If affiliate HR managers have an intellectual un-derstanding of the rationale how this decision will support specific organiza-tional strategies, they may be more in-clined to implement the decision (Kim & Mauborgne, 1993).

2. Developing a Superordinate Goal

Once the different HR managers un-derstand and accept the need for an in-tegrated IHRM practice, the second step refers to determining the desired out-come. To ensure the potential value of their cultural differences, the Group IHR managers needs to agree on the specific outcome that is desired from their interaction (Hoecklin, 1995). However, agreeing on a desired out-come is one of the most difficult steps because the differences between the HR managers may interfere with doing so. One way to overcome these differences Figure 1

A Culturally Synergistic Approach to IHRM

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is to develop a superordinate goal. Su-perordinate goals are goals that are broadly defined, giving only general di-rection which allows for the incorpora-tion of the team members’ differences (Adler, 1997; Janssens & Brett, 2000). A helpful guideline to agree upon a superordinate goal may be to formulate the goal as an ‘open task’ instead of a ‘solution.’ A goal formulated as a solu-tion often has a convergent, reducsolu-tion- reduction-istic characterreduction-istic, which only leads to resistance. For instance, setting the goal of ‘installing a pay for performance sys-tem’ is already a very specific practice of a reward system. The convergent na-ture of such a goal is likely to lead to disagreements among the different HR professionals because this particular so-lution may interfere with their different perspectives on how to reward employ-ees. In contrast, formulating the goal in a more divergent way may indicate that no right answer exists a priori. For in-stance, the goal may be ‘to develop a reward system that increases the com-mitment of employees.’ The desired outcome is here presented as an open task through which the different team members are more likely to see an op-portunity to contribute.

3. Exploring Best Practices of the Different Cultures

Once the superordinate goal is agreed upon, the Group HR managers can move on to producing ideas or courses of action that might lead to the desired outcome. A common trap in this step is that proposals are evaluated right away and that the group lapses into debate instead of developing a dialogue format

(Schein, 1999). If the group starts an early evaluation and start raising ques-tions that highlight what is wrong, the groups fails to look at a whole array of possible ideas for a desired outcome. One way that might help here is to adopt an appreciative orientation. If the group starts with an appreciative orien-tation, it will be more likely to follow up with questions that emphasize what is working and appreciating what is in each culture (Barret & Cooperrider, 1990; Cooperrider & Srivastva, 1987). The purpose of this step is therefore to explore best practices from each culture that are possibilities for a solution.

Another, most likely, pitfall in this step of exploring possibilities is that the group is being dominated by one person or a subgroup. Dominance by an indi-vidual or subgroup is generally counter-productive in an international team be-cause it stifles the contributions of nondominant, low status team members (Janssens & Brett, 1997). Inputs of per-spectives are decreasing and therefore also the possibility of learning. Insights on multicultural teams indicate that equal power or power according to each member’s ability to contribute to the task is an important condition of stim-ulating synergies in multicultural teams (Adler, 1997). Therefore, the team of HR professionals may want to decide on a principle that creates opportunities for every party to speak up and be lis-tened to. Although the principle is gen-eral, the specific rules need to be de-signed by the team itself and can take different forms. An example can be found in the Body Shop where there is a ‘hard’ rule that governs every meeting. This rule states that if conversations

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be-come heated, people make a circle so no rank exists and pass a ‘talking stick’ to each other so everybody is listened to. It’s a ‘hard’ rule meaning it is being used with no exceptions (Janssens & Brett, 1997).

A specific area of attention for mul-ticultural teams is that of language (Janssens & Brett, 2000). Although En-glish is generally the business language, it is very often the native language of only a few team members. Team mem-bers’ fluency will differ and conse-quently their capabilities to join and in-fluence the team process. Furthermore, because there is a tendency to judge others based on their language fluency (Louw-Potgeiter & Giles, 1987), admit-ting a failure to understand requires a great deal of confidence. So, members in this position are sometimes unlikely to even try to participate in team deci-sion making. One way the Group HR managers may want to deal with lan-guage differences is to develop rules for speaking up and asking for clarification. Setting rules or agreeing on how the group will deal with lack of understand-ing will make people more confident to ask for clarification when they don’t understand (Janssens & Brett, 2000). Furthermore, the act in itself is a crucial signal of respect and is likely to stimu-late cooperation and trust among the team members.

Besides language, contribution of a team member may also be influenced by the status of the affiliate that the team member represents (Janssens & Brett, 2000). Affiliates within a MNC can be expected to have differential status or power because of their competitive po-sition, contribution to market share or

profitability within the global organiza-tion. This differential status of the affil-iates may be reflected upon the status of the different HR managers and conse-quently create personal or subgroup dominance within the international team. To avoid this, the group may want to decide on the simple rule that team members from so-called lower status affiliates will present their best practices first. This insight was, for instance, used by a person managing a network of mayors from large cities all over the world to improve the organization of cities by addressing issues such as crime, pollution, safety. Because the power dynamics in this network were very much determined by the distinc-tion of the rich North versus the poor South, she decided to let mayors from poor cities in the South present their best practice first. By doing so, she en-countered a greater willingness of the higher status mayors to listen to these alternatives and a culture of equal con-tribution was induced.1

4. Assessing the Cultural

Appropriateness of the Solutions

Once a number of ideas for a solution have been proposed, the fourth step is to forecast and evaluate the consequences of adopting a particular HR practice or combination of HR practices. This pro-cess is difficult because the evaluation criteria are often either not clear or there is disagreement on which ones to use (Schein, 1999). In the context of decid-ing on an IHRM practice, an important criterion is the cultural appropriateness of implementing the HRM practice in each local affiliate. As already

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dis-cussed, the cultural component of HR practices makes it crucial to evaluate its likely impact to avoid rejection or low morale which comes from using a HR practice that is ill-suited to the local culture.

Important is also to take enough time because groups typically fail to allow enough time to evaluate the various ideas that they have produced (Schein, 1999). This step may even lead to a reformulation of the superordinate goal because the input from this step may question certain assumptions or alterna-tives previously taken for granted. Al-though the iterative nature of this step may take longer and initially appear to be inefficient, failure to evaluate the proposed HRM practice is otherwise likely to lead to rejection in the imple-mentation phase (Schein, 1999).

5. Decision Making by Consensus

Cycle 1 ends with the group making a decision to move forward on action. Fundamental to synergy is a decision rule that requires a large proportion of the team’s members to agree to the de-cision, either 2/3 majority, consensus, or unanimity (Brett, 2001). Seeking consensus is also recommended in Schein’s process model (Schein, 1999) as one of the most effective but also time-consuming methods of group de-cision making. According to Schein (1999) consensus doesn’t need to mean unanimity. Rather it is a state of affairs where communications have been suf-ficiently open, and the group climate has been sufficiently supportive, to make all members of the group feel that

they had a fair chance to influence the decision.

If consensus is crucial for synergy and decision making, the team HR man-agers may want to develop a decision rule and define how many or which team members must agree for the team to reach a decision. By setting such an integration norm, opportunities for mi-nority members are increased to express their views and influence the decision. However, important in implementing a decision rule in multicultural teams is cultural appropriateness and meaning (Janssens & Brett, 2000). Members may agree on consensus as a decision rule but disagree about what consensus means. For example, while HR manag-ers from egalitarian cultures may be used to discuss options until a consen-sus is reached, HR managers from hier-archical cultures may view such a pro-longed discussion with insiders as inappropriate because it is the outsiders who need to approve. An integrative solution to this dilemma would be that preliminary internal consensus is fol-lowed by external consensus, folfol-lowed by final internal consensus, or some other pattern that mixes internal and external consensus. Because a synergis-tic approach to IHRM means involving different HR managers from different cultures, it is advisable that the specific decision rules also reflect these mean-ings.

6. Taking Action Steps

As the group reaches some consensus on a proposed HR practice, action steps can be taken. One of the major pitfalls of this step is to make general plans

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without assigning clear responsibilities to specific members for specific actions (Schein, 1999). Another danger is that the implementation is delegated to some other person or group in the different local affiliates. This may not be a sound approach because this person or group has not been involved in formulating the superordinate goal and exploring and assessing the different alternatives. They may feel less committed to the HR practice or experience the proposal too unclear to permit implementation. Therefore, ideally the HR managers in-volved in the decision cycle are also responsible for the action cycle. If that is not possible, implementers should be brought into the decision process at the earliest possible stage, or, at least, they should be completely informed about the discussions and decisions made in the previous steps (Schein, 1999).

7. Evaluation

The final step refers to the impor-tance of an adequate evaluation. To en-sure this, the group is advised to, in advance of taking action, reach consen-sus on how they will determine whether or not the action steps are achieving the desired outcome (Schein, 1999). Con-sistent with the logic of cultural syn-ergy, this evaluation step means that the solution is being refined based upon multicultural feedback (Adler, 1997; Hoecklin, 1995). After implementing the synergistic IHR practice, the impact is observed from each culture’s per-spective. This may imply that the HR practice needs to be modified to fit the cultures or the desired outcome better. The group may therefore need to be

even psychologically prepared to go back to the initial step of formulating a superordinate goal before rushing into other alternative HR practices.

Applying the Culturally Synergistic Approach to the Belgian Case

To demonstrate this culturally syner-gistic approach to IHRM, we apply the approach to our original U.S.-Belgian story and discuss how corporate HQ could have acted differently. Following the different steps, corporate HR could have started with explaining the felt need for an integrated HR practice. The HQ’s decision originated because of the need for a dynamic and result-oriented workforce but this was never explicitly communicated to the Belgian HR man-agers. The first step would therefore consist of providing Belgian—and all other—HR managers with information of why and how a dynamic and result-oriented workforce is linked to the over-all strategy or the changing business conditions of the MNC. Setting up a two-way communication process about the desired future direction of HR is likely to lead to less resistance than imposing a specific HR practice on af-filiates.

Once the need for an integrated HR practice is understood and accepted, corporate HR could have developed a superordinate goal together with its af-filiate HR managers. Instead of impos-ing a performance appraisal system re-flecting a Gauss curve on those affiliates with a turnover of less than 15%, cor-porate HQ could have brought together all affiliate HR managers. The objective of this meeting would be to agree upon

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an overall goal that will lead to a dy-namic and result-oriented workforce. To identify such a superordinate goal, the HR managers will need to discuss what they understand by ‘a dynamic and result-oriented workforce.’ While a turnover of 15% might be a good indi-cator for HQ, this might be very differ-ent for other affiliates, as is the case for the Belgian affiliate in which low turn-over means commitment and loyalty to the organization. The challenge will be to discuss the meaning of ‘a dynamic and result-oriented workforce’ instead of arguing about specific indicators such as % turnover. If there is a con-sensus that, for instance, ‘taking respon-sibility’ is important, the superordinate goal may be to design a HR practice that will stimulate this type of behavior. Once the superordinate goal is agreed upon, the Group HR managers could move to the next step of exploring each other’s best practices. Each HR man-ager will share a practice that in his/her experience has led to the desired out-come of ‘taking responsibility’: a pay-for-performance system, a training pro-gram about leadership, or the redesign

of the tasks into semiautonomous

groups. Important in this stage is to ensure that all HR managers feel com-fortable to contribute. As discussed above, the group should therefore de-cide on some principles that create equal opportunities to speak up.

After the different experiences are being shared, the next step is to assess the cultural appropriateness of the dif-ferent proposed solutions. Based upon their understanding of their own and each others’ culture, the Group HR managers should discuss the likely

con-sequences of adopting a particular HR practice for each affiliate. As indicated above, this will take time and requires an in-depth understanding of the rela-tionship between cultural values and the meaning of HR practices. The result however may be a combination of HR practices that is acceptable for all HR managers as well as addresses HQ’s need of a dynamic and result-oriented workforce. For instance, the decision might be to install developmental inter-views twice a year in which opportuni-ties for ‘responsibility’ in the job design are being discussed, combined with a pay-for-performance appraisal at the end of the year. However, the culturally synergistic approach doesn’t end with this decision. Corporate and affiliate HR managers will need to test out and evaluate the chosen HR practice. As discussed above, this step may lead to a reformulation of the HR practice or even of the superordinate goal because the input from other parties may ques-tion certain assumpques-tions or alternatives previously taken for granted.

To conclude, when introducing a cul-turally synergistic approach for the first time, HQ needs to be aware that the process will be time-consuming. As both indicated by Adler (1997) and Ho-ecklin (1995), the process of a synergis-tic approach is not a quick fix but in-stead a systematic process. In the beginning, the process should be ad-dressed explicitly and formally; later, it will become more informal and consid-erably less-time consuming because the learning acquired during the initial meetings will become part of the orga-nization’s increasingly global perspec-tive and cross-cultural competence.

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CONCLUSION

The purpose of this paper was to offer IHR professionals insights and guide-lines of how to decide on an IHRM policy. Following the SIHR models, IHR professionals have the options of an exportive, and adaptive and an inte-grative IHR approach. The three main criteria that can help making the deci-sion are an assessment of the local and global forces, the cultural component of HR practices and the power dynamics within the MNC. As forces for global integration and local adaptation are si-multaneously present, the result may be a mix of the three IHR approaches across different tasks, affiliates and em-ployee groups.

Besides an exportive, adaptive and integrative IHR approach, IHR pro-fessionals may want to consider a cul-turally synergistic approach to IHRM. A culturally synergistic approach has the ambition to design new HR prac-tices by recognizing and transcending the individual cultures. It therefore goes beyond an integrated approach which refers only to a global diffusion of best practices and not to a new combination. The advantage of a cul-turally synergistic model lies in si-multaneously considering the need for global coordination, the recognition

of the cultural embeddedness of

HRM, and the importance of power and autonomy of the local affiliates. Global coordination can be ensured by taking the need for an integrated IHRM practice as a starting point and by evaluating at the end whether or not the chosen solution can serve as the integrated IHRM practice.

How-ever, coordination and control in this case does not mean that HQ itself can decide on the type of HR practice. Instead, coordination in a culturally synergistic approach consists of a feedback and monitoring process. The second criterion, the cultural compo-nent of HRM practices, is surely rec-ognized because the approach consists of exploring best practices of different cultures, trying to understand how these practices lead to the desired out-come and then trying to create new alternatives by blending and combin-ing practices. And finally, the ap-proach stresses as much as possible a jointly decision making process with equal power as an important condition for stimulating synergies. By choos-ing this approach, HR managers may become actively involved in develop-ing an organization that values cul-tural differences and in guiding their organization toward a more inclusive worldview.

NOTES

1. This insight was shared by one of the participants in a 4-day workshop on Appreciative Inquiry, October 1996, organized by Taos Institute with David Cooperrider & Diane Witney.

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