International Human Resource Management, 6th Edition Class Notes

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International Human ResourceManagementSixth editionInstructor’s manualPeter J. DowlingLa Trobe University, AustraliaMarion FestingESCP Europe, GermanyAllen D. Engle, Sr.Eastern Kentucky University, USASTUDY NOTES

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1Table of ContentsTable of Contents ............................................................................................................. 1Purpose and Topics covered in the Textbook .................................................................. 2Available Digital Support Resources ................................................................................ 3Part I: Chapter Notes........................................................................................................ 4Chapter 1: INTRODUCTION .............................................................................................. 5Chapter 2: THE CULTURAL CONTEXT OF IHRM .............................................................. 11Chapter 3: THE ORGANIZATIONAL CONTEXT................................................................. 18Chapter 4: IHRM IN CROSSBORDER MERGERS AND ACQUISITIONS, INTERNATIONALALLIANCES, AND SMEs ................................................................................................... 22Chapter 5: SOURCING HUMAN RESOURCES FOR GLOBAL MARKETS—STAFFING,RECRUITMENT, AND SELECTION .................................................................................... 27Chapter 6: INTERNATIONAL PERFORMANCE MANAGEMENT ....................................... 32Chapter 7: INTERNATIONAL TRAINING, DEVELOPMENT AND CAREERS........................ 36Chapter 8: INTERNATIONAL COMPENSATION ............................................................... 42Chapter 9:INTERNATIONAL INDUSTRIAL RELATIONS AND THE GLOBAL INSTITUTIONALCONTEXT ........................................................................................................................ 47Chapter 10: IHRM TRENDS AND FUTURE CHALLENGES................................................. 51Part II: Case Notes .......................................................................................................... 54Case 1 “Spanning the GLOBE”........................................................................................ 55Case 2: “Quality Compliance at the Hawthorn Arms” ................................................... 58Case 3: Wolfgang’s Balancing Act: Rewarding Healthcare Executive in a Dispersed yetIntegrated Firm .............................................................................................................. 61Case 4: Strategic Forecast and Staffing Formulation: Executive and ManagerialPlanning for Bosch-Kazakhstan ...................................................................................... 66Case 5: Local and International? Managing Complex Employment Expectations......... 71Case 6: Expatriate compensation at Robert Bosch GmbH: coping with modern mobilitychallenges....................................................................................................................... 78Case 7: Balancing Values - An Indian Perspective on Corporate Values from Scandinavia........................................................................................................................................ 82Case 8: Just another move to China? The impact of international assignments onexpatriate families.......................................................................................................... 88

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2Purpose and Topics covered in the Textbook1The major objective of this textbook is to provide an overview of international human resourcemanagement; however, this is a complex term. The field of international HRM has beencharacterized by three broad approaches. The first emphasizes cross-cultural management:examining human behavior within organizations from an international perspective. The secondapproach has developed from comparative industrial relations and HRM literature and seeksto describe, compare, and analyze HRM systems in various countries. A third approach seeksto focus on aspects of HRM in multinational firms. In this book, we take the third approach.Our objective is to explore the implications that the process of internationalization has forHRM activities and policies. In particular, we are interested in how HRM is practiced inmultinational enterprises (MNEs).Typically, HRM refers to those activities undertaken by an organization to utilize its humanresources effectively. These activities include, but are not limited to, the following:•Human resource planning•Staffing (recruitment, selection, placement)•Performance management•Training and development•Compensation (remuneration) and benefits•Industrial relationsThis volume intends to discuss these topics in an international context by explicitly consideringthe context of the multinational enterprise. Therefore, we also include a chapter on thecultural context on IHRM and the organizational context, as well as cross-border mergers andacquisitions, international alliances, and SMEs. An introduction and a conclusion complete thevolume. The structure of the book is indicated by the names of the ten chapters, which are asfollows:1.INTRODUCTION2.THE CULTURAL CONTEXT OF IHRM3.THE ORGANIZATIONAL CONTEXT4.IHRM IN CROSSBORDER MERGERS & ACQUISITIONS, INTERNATIONAL ALLIANCES, ANDSMEs5.SOURCING HUMAN RESOURCES FOR GLOBAL MARKETS—STAFFING, RECRUITMENT,AND SELECTION6.INTERNATIONAL PERFORMANCE MANAGEMENT7.INTERNATIONAL TRAINING, DEVELOPMENT, AND CAREERS8.INTERNATIONAL COMPENSATION9.INTERNATIONAL INDUSTRIAL RELATIONS AND THE GLOBAL INSTITUTIONAL CONTEXT10.IHRM TRENDS AND FUTURE CHALLENGESThe sixth edition of this book has been designed as a standalone text for an advancedundergraduate or graduate level overview course on international HRM. Alternately, the textcan be used in support of a broader international management text to emphasize the criticalnature of people issues for multinational enterprises.1The authors would like to thank David St. George, whose work on an earlier version of the instructor’smanual was partly adopted for the sixth edition, and Julia Spieß, who prepared most of the sixthedition’s Part I in close cooperation with the authors.

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3The chapter objectives, chapter summaries and additional readings features provide a focusedset of learning objectives and heuristic support for students and instructors alike. The in-chapter cases and the in-depth case studies at the end of the text provide students with theopportunity to apply and contextualize the definitions, theories, models and concepts in thetext. The in-depth case studies at the end of the text have been specifically designed toprovide instructors with a series of platforms to explore one or more of the functional areas ofIHRM as well as investigate some of the cross cultural and unique issues MNEs face in thedeployment of people around the world. In this sense, several of the cases have been writtenso they can be used to delineate the topics presented in more than one chapter of the text.The additional readings and extensively updated endnotes provide graduate instructors andgraduate students with an integrated set of references for further exploration and review. Atthe same time the text does not assume the reader has an advanced understanding of HRM orinternational management.This instructor’s manual offers notes on the book chapters in Part I and notes on the cases inPart II.Available Digital Support ResourcesBook-Level Assets•Glossary•Useful weblinks•Online Case StudiesChapter-Level Assets•eBook•Games (Beat the Clock and Crosswords)•Student Handout PowerPoint•Flashcards•Test Your Knowledge•Revision Questions•Essay Questions

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4Part I: Chapter Notes

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5Chapter 1: INTRODUCTIONLearning objectives:•Being able to define key terms in international human resource management(IHRM) and consider several definitions of IHRM.•Knowing about the historically significant issue of expatriate assignmentmanagement and reviewing the evolution of these assignments to reflectincreasing diversity with regard to what constitutes international work and thetype and length of international assignments.•Getting acquainted with the differences between domestic and internationalhuman resource management and detailing a model that summarizes the variablesthat moderate these differences.•Understanding the complexity of IHRM and the increasing potential for challengesto existing IHRM practices and current models, and developing an increasingawareness of the wide number of choices within IHRM practices due to increasedtransparency and the faster and more detailed diffusion of these practices acrossorganizational units and firms.Chapter Summary:2The purpose of this chapter is to provide an overview of the emerging field of internationalHRM. This is achieved by:•Defining key terms in IHRM and considering several definitions.•Introducing the historically significant issue of expatriate assignment managementand reviewing the evolution of these assignments to reflect increasing diversitywith regard to what constitutes international work and the type and length ofinternational assignments.•Outlining the differences between domestic and international human resourcemanagement by looking at six factors (more HR activities; the need for a broaderperspective; more involvement in employees’ personal lives; changes in emphasisbased on variances in the workforce mix of expatriates and locals; risk exposure;and more external influences) and detailing a model which summarizes thevariables that moderate these differences.•Presenting the complexity of IHRM, the increasing potential for challenges toexisting IHRM practices and current models, and developing an increasingawareness of the wide number of choices within IHRM practices due to increasedtransparency and the faster and more detailed diffusion of these practices acrossorganizational units and firms.We conclude that the complexity involved in operating in different countries and employingdifferent national categories of employees is a key variable in differentiating betweendomestic and international HRM, rather than any major differences between the HR activitiesperformed. We also discuss four other variables that moderate differences between domesticand international HRM: the cultural environment; the industry (or industries) with which themultinational is primarily involved; the extent to which a multinational relies on its homecountry’s domestic market; and the attitudes of senior management. These five variables areshown in Figure 1.3. Finally, we discuss a strategic HRM model applied in multinational2Bullet points in the chapter summaries include important parts taken from the lecture, whichare covered by the PowerPoint materials provided to instructors.

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6enterprises (Figure 1.4), which draws together a number of external and organizational factorsthat impact on IHRM strategy and practice and in turn on MNE goals.Links to other chapters:This introductory chapter provides the basis for all the other chapters. The definitions andunderstanding of the differences between HRM and international HRM described herein arekey to understanding the other chapters of the book.Discussion Questions:1.What are the main similarities and differences between domestic and international HRM?This question is addressed in ‘Defining international HRM’ (pp. 2-3) and ‘Differencesbetween domestic and international HRM’ (pp. 4-5):•HRM = ‘[...] those activities undertaken by an organization to utilize its humanresources effectively’(p. 2), including at least: human resource planning, staffing(recruitment, selection, placement), performance management, training anddevelopment, compensation (remuneration) and benefits, and industrial relations(similarities between domestic and international HRM).Differences:•Domestic HRM involves employees working within only one national boundary.•IHRM also includes aspects pertaining to the national or country categoriesinvolved in international HRM activities (the host country where a subsidiary maybe located, the parent country where the firm is headquartered, and ‘other’countries that may be the source of labor, finance, and other inputs), as well asthe three categories of employees of an international firm (host country nationals,parent country nationals, and third country nationals).•In IHRM, staff are moved across national boundaries into various roles within theinternational firm’s foreign operations (expatriates/international assignees).•In IHRM, the complexity of operating in different countries and employingdifferent national categories of workers is a key variable that distinguishesdomestic and international firms. This complexity is due to six factors: more HRactivities, the need for a broader perspective, more involvement in employees’personal lives, changes in emphasis as a result of variances in the workforce mix ofexpatriates and locals, risk exposure, and broader external influences.2.Define these terms: “International HRM”, “PCN”, “HCN”, and “TCN”.This question is addressed in ‘Defining international HRM’ (pp. 2-4).International HRM=•‘[…] interplay between the three dimensions of human resource activities, types ofemployees, and countries of operation’ (Morgan).•‘We define the field of IHRM broadly to cover all issues related to themanagement of people in an international context. Hence, our definition of IHRMcovers a wide range of human resource issues facing MNCs in different parts of

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7their organizations. Additionally, we include comparative analyses of HRM indifferent countries’ (Stahl and Björkman, 2010);definition used in this book(p.4).Three categories of employees in an international firm:•PCN – parent country national•HCN – host country national•TCN – third country nationalFor example, the US multinational IBM employs British citizens in its British operations(HCNs), often sends US citizens (PCNs) to Asia-Pacific countries on assignment, andmay send some of its Singaporean employees on assignments to its Chineseoperations (as TCNs). The nationality of the employee is a major factor in determiningthe person’s “category”, which in turn is frequently a major driver of the employee’scompensation and employment contract.3.Discuss two HR activities in which a multinational firm must engage, which would not be required in adomestic environment.The question refers to material found on p. 5 under ‘More HR activities.’To operate in an international environment, a human resources department mustengage in anumber of activities that would not be necessary in a domestic environment. Examplesofrequired international activities are: international taxation, international relocationand orientation, administrative services for expatriates, host-government relations,and language translation services.•Expatriates are subject to international taxation, and often they have bothdomestic (i.e. home country) and host country tax liabilities. Therefore, taxequalization policies must be designed to ensure that there is no tax incentive ordisincentive associated with any particular international assignment.Theadministration of tax equalization policies is complicated by the wide variations intax laws across host countries and by the possible time lag between thecompletion of an expatriate assignment and the settlement of domestic andinternational tax liabilities. In recognition of these difficulties, many MNEs retainthe services of a major accounting firm for international taxation advice.•Host government relations represent an important activity for the HR departmentin an MNE, particularly in developing countries where work permits and otherimportant certificates are often more easily obtained when a personal relationshipexists between the relevant government officials and multinational managers.Maintaining such relationships helps resolve potential problems that can becaused by ambiguous eligibility and/or compliance criteria for documentation suchas work permits. US-based multinationals, however, must be careful in how theydeal with relevant government officials, as payment or payment-in-kind, such asdinners and gifts, may violate the US Foreign Corrupt Practices Act (FCPA).Further discussion on other activities can be found on pp. 5-6.

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84.Why is a greater degree of involvement in employees’ personal lives inevitable in many internationalHRM activities?Material to this question can be found in ‘More involvement in employees’ personallives’ (p. 6).•A greater degree of involvement in employees’ personal lives is necessary for theselection, training, and effective management of both PCN and TCN employees.The HR department or HR professional needs to ensure that the expatriateemployee understands housing arrangements, health care, and all aspects of thecompensation package provided for the assignment (cost-of-living allowances,premiums, taxes, and so on).•In the international setting the HR department must be much more involved inorder to provide the level of support required, and as a consequence it will needto know more about the employee’s personal life. For example, some nationalgovernments require the presentation of a marriage certificate before granting avisa for an accompanying spouse. Thus, marital status could become an aspect ofthe selection process, regardless of the best intentions of the MNE to avoid using apotentially discriminatory selection criterion.5.Discuss at least two of the variables that moderate differences between domestic and international HRpractices.This question addresses material found in ‘Variables that moderate differencesbetween domestic and international HRM’ (pp. 8-9) (see Figure 1.3).The text names five variables that act as “moderators” (diminishing or accentuatingthe differences between domestic and international HRM): complexity, the culturalenvironment, industry type, extent of reliance of the multinational on its homecountry domestic market, and the attitudes of senior management to internationaloperations.Complexity:•Many firms from advanced economies, with limited experience in internationalbusiness, underestimate the complexities involved in successful internationaloperations—particularly in emerging economies. There is considerable evidence tosuggest that business failures in the international arena are often linked to thepoor management of human resources.Cultural environment:•Possibility of employee culture shock.•Recognition and appreciation of cultural differences is essential, becauseinternational business involves the interaction and movement of people acrossnational boundaries.•In research, issues are: little agreement on either an exact definition of culture oron the operationalization of this concept, as well as the emic-etic distinction (emicrefers to culture-specific aspects of concepts or behavior, and etic refers toculture-common aspects, i.e. universalitydivergence-convergence debate).•Cultural awareness is essential for the HR manager at corporate headquarters as

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9well as in the host location. Coping with cultural differences, and recognizing howand when these differences are relevant, is a constant challenge for internationalfirms.Industry type:•This is of considerable importance because patterns of international competitionvary widely from one industry to another: multi-domestic versus global industry.•Multi-domestic industry (competition in each country is essentially independent ofcompetition in other countries, e.g. retail, distribution, and insurance).The HR department’s role will most likely be more domestic in structure andorientation. At times there may be considerable demand for international servicesfrom the HRM function.•Global industry (a firm’s competitive position in one country is significantlyinfluenced by its position in other countries, e.g. commercial aircraft,semiconductors, and copiers).Role of the HR department:oan explicit recognition by the parent organization that its own peculiarways of managing human resources reflect some assumptions and valuesof its home culture;oan explicit recognition by the parent organization that its peculiar ways areneither universally better nor worse than others, but are different andlikely to exhibit strengths and weaknesses, particularly abroad;oan explicit recognition by the parent organization that its foreignsubsidiaries may have other preferred ways of managing people that areneither intrinsically better nor worse, but could possibly be more effectivelocally;oa willingness from headquarters to not only acknowledge culturaldifferences, but also to take active steps in order to make themdiscussable and therefore usable;oand building a genuine belief by all parties involved that more creative andeffective ways of managing people could be developed as a result of cross-cultural learning.Changes that are required to internationalize the HR function have more todo with mindsets than with behaviors.Pages 9-15 consider these five aspects in detail.References:Recent overviews on research in International Human Resource Management can be found in:Stahl, G., Björkman, I., and Morris, S. (Eds.) (2012). Handbook of Research in InternationalHuman Resource Management. 2ndEd. Cheltenham, UK: Edward Elgar Publishing.Brewster, C. & Mayrhofer, W. (Eds.) (2012). Handbook of Research in Comparative HumanResource Management. Cheltenham, UK: Edward Elgar Publishing.

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10On convergence and divergence see:Festing, M. (2012). Strategic Human Resource Management in Germany: Evidence ofConvergence to the U.S. Model, the European Model, or a Distinctive National Model? In:Academy of Management Perspectives, Vol 26, (2), 37-54.

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11Chapter 2: THE CULTURAL CONTEXT OF IHRMLearning objectivesChapter1observedthatinternationalHRMdiffersfromnationally-orientedHRMpredominantly in the complexities that result from employees of various national originsworking in different countries. People who work in internationally operating companies, aswell as customers, suppliers, or representatives of government institutions in the host country,often face very different cultural and institutional environments due to differing socializationexperiences. In this chapter we systematically review the environment of international HRMdecisions so that the complexity of these decisions can be better understood and adequatesolutions developed. This chapter has been designed in order to enable students to learnabout the key findings of intercultural comparative research on:•Definitions of culture•Cultural concepts•Results of intercultural management studies such as Hofstede’s research, theGLOBE study and others•Reflections on cross-cultural management research•Discussion of the development of culturesThese concepts are highly relevant to developing a more comprehensive understanding andexplanation of the complexity of international HRM.Chapter SummaryIn this chapter, we outline how the cultural environment may influence HRM. In summary itcan be concluded that an adequate understanding of the cultural context, as it impacts on thebehavior of an organization’s employees, is of critical importance. Thus, the results of cross-cultural comparative research may provide valuable hints to managers about how to cope withemployees from foreign cultures.Furthermore, these research results can form the basis forthe development of intercultural training measures. These results could also be of great use toHRM in an international firm, because they could assist in undertaking a structured analysis ofthe transferability of specific elements of a parent firm’s existing HR policy to foreignsubsidiaries. In this context, it would be conceivable to decide whether incentive systems forgroups or for individuals would be effective in a specific culture.Table 2.1 in the text summarizes these ideas about the cultural context and gives examples ofenvironmental differences which could lead to problems when MNEs attempt to introduceworldwide standardized HRM practices. Within this context, it is important to recall thediscussion on the convergence and divergence of HRM and work practices, as mentioned inthe first chapter.Links to other chapters and cases:This chapter provides important information on one of the key contextual issues forinternational human resource management. The importance of the cultural environment hasalready been introduced in Chapter 1 and will be addressed in many chapters again or linkedto topics such as the cultural adaptation process (Chapter 5), international performancemanagement (Chapter 6), and intercultural training (Chapter 7).Cases that provide the basis for a cultural discussion include Case 3 on transnationalcompensation, where, for example, risk aversion (which could be linked to uncertainty

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12avoidance) plays an important role. A more general discussion on cultural values could beincluded in Case 7, which examines balancing values between Scandinavia and India.Discussion Questions1.Define culture. How can culture be conceptionalized?This question addresses material found in ‘Definition of culture’ (p. 24) and ‘Schein’sconcept of culture’ (pp. 24-25).To date, there is no predominant consensus on the exact meaning of culture:•‘Culture consists of patterned ways of thinking, feeling, and reacting, acquired andtransmitted mainly by symbols, constituting the distinctive achievements of humangroups including their embodiments in artifacts; the essential core of culture consistsof traditional […] ideas and especially their attached values…’ (Kluckhohn and Kroeber,1950s).•‘[Culture is] mental programming’ or ‘software of the mind’ (Hofstede, 1991).•Culture includes the customs of a community that are practiced by a majority and arebased on four basic elements: standardization of communication, thought, feeling, andbehavior (Hansen).Culture can be conceptualized on various levels (Schein, 2004):1.Artifacts or creations (conscious): visible organizational structures and processes;easily measurable, but hard to interpret variables such as, for example, the economicgrowth of a country or its political system.2.Values (partly conscious and partly unconscious): values of a company or culture,found in the intermediate level of consciousness; based on underlying assumptions,for example they are the basis for national legislation or attitudes towards abortion.Hofstede’s study can be positioned on this level.3.Underlying assumptions (invisible and unconscious): includes convictions, perceptions,thoughts, and feelings concerning, for example, the nature of reality and the nature oftruth, time dimensions, the effect of spatial proximity and distance, the nature ofbeing human, types of human activity, the nature of human relationships throughreligions, the basic understanding of democracy, and capitalist market organizations.Influences from artifacts, through values to underlying assumptions, are much weakerthan those leading in the opposite direction, because the influence of underlyingassumptions on values and artifacts is stronger than vice versa.2.Outline Hofstede’s cross-cultural management study and discuss it accordingly.This question is addressed under ‘Hofstede’s cross-cultural management study’ (pp.26-33).•It was the first major study in cross-cultural comparative research.•It can be positioned on the values level (according to Schein).Original study at IBM (1967-1973):•N=116,000 questionnaires which were completed by IBM employees at all hierarchicallevels and with various qualifications.

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13•Four dimensions of country cultures were identified: power distance, uncertaintyavoidance, femininity vs. masculinity, and individualism vs. collectivism.•These dimensions imply consequences for the structures of organizations.Chinese Value Survey•N=100 people from 23 countries.•The results reflected three dimensions similar to power distance, individualism vs.collectivism, and masculinity vs. femininity and one new dimension: Confucianismdynamics, which could not be related to the results of the original IBM study.DimensionDefinitionExamplesofCountry CharacteristicsMajorDifferencelies in…PowerDistanceThe acceptanceofmembers of a culturethat power is notdistributed equally ininstitutions expressesthe emotional distancebetween employees andsuperiorsHigh: acceptance of ahierarchical organizationstructure, in which everyindividual can occupy theirplace without any need forjustificationMany South Asian countries,South AmericaLow:aspiration to equal powerdistribution, demand forexplanations for any instanceof formalized power inequalityUS, Anglo Saxon countries… how powerinequality is dealtwithUncertaintyAvoidanceExtent to which themembers of a culturefeel threatened byuncertain, ambiguousand/or unstructuredsituations and try toavoid themStrong: strict beliefs andbehavioral codes, no tolerancefor people and ideas thatdeviate from theseSome Asian Cultures, e.g.Singapore, Hong Kong,German-speaking countriesWeak:significance of practiceexceeds the significance ofprinciples; high tolerance ofdeviationsScandinavia…the reaction ofindividuals to timepressure oruncertainties in thefutureFemininity vs.MasculinityBased on theassumption that valuescan be distinguished asmore masculine or morefeminineMasculine orientation:comprises the pursuit offinancial success, heroism anda strong performanceapproach; role flexibility is lessclear-cutGerman-speaking countriesFeminineorientation:preferences for life quality,modesty and interpersonalrelationships; role flexibility ismore clear-cutScandinavia… the form ofsocial rolesattributed togender by therelevant societyIndividualismvs. CollectivismExtent to whichindividual initiative andcaring for oneself andone’s nearest relativesare preferred by asociety as opposed to,for example, publicassistance or theconcept of extendedfamilyIn moreindividualistcultures,there is merely a casualnetwork of relationshipsbetween people. Each person isprimarily responsible forhimselfUS, Anglo Saxon countriesMorecollectivecultureshavecloser, more clearly definedsystems of relationships. Thisapplies both to extendedfamilies as well as companiesMany South Asian countries,South America… the predominantself-sufficiencyamong individualsin a society (private& professional)Confucianismor Long-termOrientationBasic orientation inthelife of people, which canbe either more long-term or short-term innatureLong-term: great enduranceand/or persistence in pursuinggoals, position of ranking basedon status, adaptation oftraditions to modernconditions, respect for socialand status obligations withincertain limits, high savingsrates and high investmentShort-term: personal candorand stability, avoiding loss offace, respect for social andstatus obligations without theconsideration of costs, lowsavings rates and lowinvestment activity,expectations of quick profit,respect for traditions, andx…the attitudetowards time(short-long; past-present-future)

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14activity, readiness tosubordinate oneself to apurpose, and the feeling ofshamefuture-oriented, dynamicAsian Countriesgreetings, presents andcourtesies based on reciprocitypresent-oriented or past-oriented, relatively staticUSDiscussion(see pp. 33-34 ‘A reflection on the Hofstede study’):Pro:•Historical prominence—an important contribution to cross-cultural managementresearch.•Could be repeated at different points in time.•Results could serve as guidelines for explaining behavior, at least in initial orientation.Contra:•Deterministic and universalistic concept of culture (see discussion question 6).•Reductionist approach.•Lacking theory—limited validityoDimensions were mainly derived a posteriorioAs Hofstede’s study is placed on the value level—the intermediate level of theSchein concept—it is questionable how far standardized questionnaires cancapture the unconscious and therefore the underlying motives of actionsoNo line between practices per se and perceived practicesoLack of separation between values and behavioroPotential distortion of the Western perspective (the 2nd (Chinese Value) studytook place because the risk that the cultural identity of researchers fromWestern industrial countries might influence the form of the questionnairecould not be ruled out.•Countries rather than cultures are delimitedoE.g. Yugoslavia in the 1990s and multicultural societies like Belgium show thatnational borders do not necessarily contain homogeneous groupsIt shouldbe assumed that national cultures are not the only influencing factors ofbehavior.•Data is not representative—limited validityoData from only one company (IBM) —although this helps to keep many factorsconstant—with a strong corporate culture and corresponding selectedemployees (no typical national citizens)oMainly limited to middle-class males in marketing and service positionsoFuture research should imply cross-level studies, intra-cultural differences,moderator variables, and the effects of interactions between culture variables.•Static and outdatedoAlthough it is assumed that cultures do not change fundamentally over 40-50years, changes can be seen, for instance, through strong economic growth andsignificant system changes.3.Outline the methodical procedure and the results of the GLOBE study.Methodical procedure (material covered on pp. 35-36 in the text):•Phase I (1993/1994): the development of underlying research dimensions (new socialand organizational cultural dimensions and six leadership dimensions).

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