Organizational culture and HRM at a Danish company located ... · pressures from MNC‟s...

Retos de las ciencias administrativas desde las economías emergentes: Evolución de sociedades.

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Organizational culture and HRM at a Danish company located in

Monterrey, Mexico.

Laura Zapata Cantú*, Jacobo Ramírez**, Anna Luisa Cabrera***

*EGADE Business School. **Copenhagen Business School.

***Tecnológico de Monterrey. Campus Monterrey.

Monterrey, Nuevo León. México.

Email: [email protected]

Teléfono: +52 (81) 8625-6000

Abstract:

Researchers have referred to organizational culture as a means to

develop and implement business policies and practices such as

human resources management. A general hypothesis in this role

suggests that if an organization possesses “strong culture”, then it will

perform at higher level of productivity, which can be analyzed based

on financial and nonfinancial outcomes. The interplay between

national and organizational cultures on HRM is complex.

Nevertheless, companies can find out the way to adapt both cultures

in order to achieve success. We found evidence of this based on a

case study of a Danish toy producer company located in Mexico. We

interviewed blue and white-collar workers and collected secondary

data and found out that these two different national and organizational

cultures seem to match and have achieved success competing with

other subsidiaries in the world. Respect to formal and informal

institutions has been a cornerstone for this to happen.

Keywords: organizational culture, HRM, intercultural management

Capítulo 5. Administración Multicultural

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Organizational scholars have addressed the variety of complexities between the

environment and organizational process. In particular, national cultural factors are

linked to play a key role in determining levels of organizational outcomes (e.g. Aycan

et al., 1999; Fisher et al., 2007; Marcoulides and Heck, 1993; among others).

Researchers have referred to organizational culture as a means to develop

and implement business policies and practices such as human resources

management (HRM) (e.g. Guest, 2000). A general hypothesis in this role suggests

that if an organization possesses “strong culture”, then it will perform at higher level

of productivity (Denison, 1984), which can be analyzed based on financial and

nonfinancial outcomes.

Although researchers have acknowledged the role of organizational culture on

HRM policies and practices outcomes, little research has been developed in

emerging countries on the role of the firm‟s external environment on its organizational

culture.

The interplay between national and organizational cultures on HRM is

complex. However, in this paper, building findings from a case study of two HRM

policies and practices –recruitment and selection, and training and development in a

MNC- we examine how organizational culture and its external environment, namely

national culture shapes the implementation of these practices. Given empirical

evidence from a Danish subsidiary in Mexico, we explain the dynamic between

national –viewed as the institutional context- and organizational cultures on HRM.

In the first section of this article, we present the theoretical background of our

study. We integrated national culture by an institutional approach (e.g. DiMaggio and

Powell, 1991; Scott, 2001) to organizational culture and they impact to HRM. Next,

we present our methodology and research setting –a Danish toy producer-

Implications for theory and practitioners are discussed in the final section.

Theoretical Background

National Culture

Culture is a subject of much controversy in its definition and research. There are

different propositions to define culture. A definition of culture proposed by House and

Javidan (2004: 15) states: „shared motives, values, belief, identities, and

interpretations or meaning of significant events that result from common experiences

of members of collectives and are transmitted across age generations‟. Based on this


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definition and according to researchers (e.g. House et al., 2002) culture is often

manifested in two distinct ways. First, culture as values, belief, schemes, and implicit

theories commonly held among members of a collectively (society or organization),

and these are variously called attributes of cultures (Chhokar et al., 2007: 4). This

first distinction does not present a clear division between organizational and national

(within a country) culture. Second, culture is also commonly observed and reported

as practices of entities such as families, schools, work organizations, economic and

legal systems, political institutions, and the like (Chhokar et al., 2007: 4). These

characteristics are also being researched within the institutional theoretical approach

(Scott, 2001) to present an alternative approach to study national culture. .

Foreign-owned subsidiaries in emerging countries can be analyzed based on

institutional factors of the local environment –formal and informal institutions, such as

legal system, norms and costumes; and by international isomorphic –institutional

pressure on adapting processes from the MNC parent company (Björkman, 2006,

Westney, 1993). At the same time, scholars have emphasized on the coercive

pressures from MNC‟s headquarters to adopt certain organizational practices; and

taken-for-granted practices that may be diffused through foreign employees working

in the subsidiary. Researchers has found that HRM practices of MNCs overall were

more localized than globally standardized, indicating stronger local than international

institutional pressures (Björkman, 2006: 466). In the following section, we present our

theoretical framework to define organizational culture.

Organizational culture

Researchers have postulated that organizational culture consist of three interrelated

dimensions: a socio-cultural system of the perceived functions of the organization‟s

strategies and practices, an organizational value system, and the collective belief of

the individuals working within the organization (Marcoulides and Heck, 1993: 2009).

According to Frost et al., (1985:17) „talking about organizational cultures seems to

mean talking about the importance for people of symbolism -of rituals, myths, stories

and legends –and about the interpretation of events, ideas, and experiences that are

influenced and shaped by the groups within which they live‟. Organizational culture is

highly significant for how companies and other organizations function: from strategic


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change, to everyday leadership and how managers and employees relate to and

interact with customers as well as to how knowledge is created, shared, maintained

and utilized (Alvesson, 2002: 2); which is central in governing the understanding of

behavior, social events, institutions, ritual, artifact among other issues (Alvesson,

2002).

In the model developed by Schein (1985) organizational culture is represented

at three levels: 1) behaviors and artifacts; 2) espoused belief and values; and 3)

underlying assumptions, see figure 1.

Figure 1: Levels of culture

Source: Schein (1992: 17)

Artifacts of corporate culture are visible organizational structures and

processes –hard to decipher. This includes all the phenomena that one sees, hears,

and feels when one encounters a new group within unfamiliar culture (Schein, 1985:

17). Artifacts include the physical environment such as lay-out, poster, business

cards, among others; which remind members of the vision, values, and corporate

goals (e.g. Schein, 1985; Schneider, 1988).

Exposed values such as strategies, goals, philosophies (espoused

justifications) reflects someone‟s original values (Schein, 1985: 19). According to

Schein if the espoused values are congruent with the underlying assumptions, then

the articulation of those values into a philosophy of operating can be helpful in

bringing the group together, serving as a source of identify and core mission (1992:

Artifacts

Values

Underlying

assumptions


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21). Finally, basic underlying assumptions are the unconscious, take-for-granted

beliefs, perceptions, thoughts, and feeling (ultimate source of values and actions)

Schein (1992: 17). According to researchers, the model developed by Schein can be

useful to analyze both organizational and national cultures.

Organizational culture and HRM

According to Stone-Romero and Stone (2008), culture of individuals, which we refer

here as national culture may influence HRM processes and practices at each of the

just-noted phases. Stone-Romero and Stone (2008) argue that HRM processes and

practices also are a function of organizational culture. It is determined largely by the

culture (e.g., values and ideologies) of the dominant group (e.g. able-bodied, white,

male, Anglo-Saxon, Protestants) in an organization. However, members of non-

dominant groups (e.g., females, racial minorities, and people with disabilities) may

also have an effect on an organization‟s culture (Stone-Romero and Stone 2008:

309).

In this context, there are different strategies in which MNC could devise in

order to implement worldwide a corporate organizational culture, taking into

consideration the national differences. In terms of HRM, the methods by which this

could be accomplished are: recruiting “like-minded” individuals –those that share the

values of the company (Schneider, 1988: 232), in addition to training and

socialization programs for developing strong organizational commitment through

compensation (Schneider, 1988).

Selection is one of the major tools for developing and promoting corporate

culture (Schein, 1985). Candidates are carefully screened to “fit in” to the existing

corporate culture, assessed for their behavioral styles, beliefs, and values

(Schnieder, 1988: 239). For example, the pre-hire phase, the cultures of prospective

job applicants (e.g., culture-based values) influence the degree to which they will be

attracted to an organization and motivated to become organizational members

(Stone-Romero and Stone, 2008: 309).

Socialization is another powerful mechanism of promoting corporate culture.

In-house company programs and intense interaction during off-site training can

create and “esprit de corps”, and a shared experience, and interpersonal or informal


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network, a company language or jargon, as well as develop technical competencies

(Schneider, 1988: 239).

Preference for compensation system and bonuses are clearly linked to cultural

attitude (Schnieder, 1998: 238). For example, in one MNC‟s Danish subsidiary, a

proposal for incentives for salespeople was turned down because it favored specific

groups, i.e., ran counter to their egalitarian spirit (Schneider, 1988: 238).

Expatriate transfers are also used for socialization and development of an

internal “cadre” (e.g. Edstrom and Galbraith, 1977). The rotation of expatriates from

headquarters through subsidiaries and sending of local nationals from the

subsidiaries to headquarters occur for different reasons, such as staffing,

management development, and organization development (Schneider, 1988: 240).

Organizational culture and National culture

National Culture -Mexico

Mexico is now predominantly an urban country, almost three fourths of its population

lives in cities. The population of Mexico is approximately 112 million. Fifty percent of

Mexicans are younger than 15 years of age. The average of formal education is 8

years, illiteracy is 7.6% and half of this is concentrated in the elderly (Instituto

Nacional de Estadísticas Geografía e Informática [INEGI] 2010). Most of workers are

not fluent in English and thus could not easily express themselves with the

managers. The workers found it nearly impossible to express their concerns or

issues to plant managers because of the language barriers.

Authoritarian leadership, lack of trust in government and the political process,

a hierarchical social structure, and enduring poverty have also been present in the

modern Mexico (Howell et al., 2007: 732).

Traditional societies such Mexico, emphasizes family, class, reverence for the

past, and ascribe status, often accept and respond to autocratic (non-participative)

leadership (Howell et al., 2007:733). For example, when selecting among job

applicants, Mexican employers typically look for a work history that demonstrate the

ability to work harmoniously with others and cooperatively with authority. Mexican

employers tend to seek workers who are agreeable, respectful, and obedient rather

than innovative and independent DeForest (1994: 34).


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Authoritarian and autocratic behavior can have also some implications to

discrimination practices in the workplace. Although Mexican legal statutes regarding

discrimination are clear, they are rarely enforced. According to researchers local

culture tends to support the perpetuation of discriminatory recruitment practices

(Daspro, 2009: 225). Particularly, women still face substantial bias in job selection

process. Mexican managers might ask female applicants personal questions about

their marriage plans or the number of children they plan to have. Even women who

are bilingual college graduates find it difficult to gain employment commensurate with

their skills. However, the role of women has been changing dramatically. The mean

level of education for women is close to that of man, and women are assuming

leadership positions in business and particularly in politics (Howell et al., 2007:731).

Opening the Mexican economy to global competition has had significant

impacts on the business behavior. The „mañana culture‟ often attributed to Mexico by

outsiders, is inconsistent with a growing achievement orientation in Mexico (Howell et

al., 2007:760). Therefore, different environments require different strategies; the

corporate culture needs to fit that strategy (Schwartz and Davis, 1981; Schneider,

1988).

On the other hand, the boss says something and all employees have to follow

that instruction. There is no room for discussion or for the expression of opinion. You

can disagree to your boss. In Mexico, unfortunately, that does not happen. We

cannot say something against (the supervisor‟s) opinion in public. Maybe after the

meeting (rarely) but that is in private. In public, it‟s not a common practice (Stephens

and Greer, 1995: 43).

The need to save face is what makes it so difficult for Mexicans at all levels

to accept criticism and make changes. Many find it humiliating to acknowledge

having made a mistake. Typically, in a Mexican firm, staff meetings often serve as a

forum for people to receive orders, rather than to report, discuss and problem solve

among managers (DeForest 1994: 36).

Mexico‟s cultural traditions, a status-oriented authoritarian style in dealing with

followers has been more prevalent, this can be associated with fear of disagreeing

with one‟s superior‟s instructions (Howell et al., 2007:736). Mexican workers do note

approve of leaders who are rude of who offend or embarrass followers in public. In


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order to be accepted, leaders must respect their followers‟ pride and customs (Howell

et al., 2007:742).

In Mexico, some managers feel little need to share information and objectives

with their followers. Subordinates may often be intimidated by status differences and

become reluctant to discuss problems with superiors because of the cultural norm of

avoiding interpersonal conflict (Howell et al., 2007:742). Therefore, managers were

expected to design strategies, develop proposals, and offer suggestions that are then

discussed by subordinates who are expected to carry them out (Howell et al.,

2007:743).

The challenge is to alter the Mexican work culture. One manager stated: „The

greatest challenges we have is education and training for the employees. We have a

culture of work, but not a culture of quality‟. The challenge is to create a quality

oriented culture. „What we are trying to do, more than anything, is to create a

different culture. A different way of thinking, so that each and every one of us are

quality inspectors in our jobs‟ (Sargent & Matthews, 1998: 90).

However, modernity has brought also challenges for the Mexican society. For

example, traditional family disintegration is one of the main problems confronting the

modern society (e.g. Howell et al., 2007: 732). Additionally, violence due to drug

trafficking is a major concern in Mexico, which affects particularly Monterrey city.

Denmark

Denmark is a small country and is dominated by small and medium-sized companies

and a few larger companies. Denmark has a fairly strong heritage of family-owned

companies (Schultz et al., 2002: 227).

Denmark is characterized by a high level social welfare (Schramm-Nielsen,

2000). Employees (in the whole organizational structure in both public and private

organizations) are insured against unemployment, sickness and retirement, and the

employees have five weeks-paid holidays from the first year of work. To some

observers „Denmark is an over regulated society and Danes tend to abide by the

rules life in Denmark obviously becomes less risky and less unpredictable‟

(Schramm-Nielsen 2000: 9).

The Danes have been proud of what they have considered a unique labor

market model. There is a long tradition in which the employers and the trade unions

have had a centralized system of negotiations that determined pay and working


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conditions. One of the characteristics of the Dane labor relation is the philosophy of

democratization of the work-place (Haug, 2004): „It encompass all employees

participation in the decision making process from the individual workers on the shop

floor, through various cooperation committees or work councils, to the board of

directors, and even outside of the organization‟ (Haug, 2004: 135). In the Danish

model, which has become known as „flexi-security‟, there are few restrictions on

companies hiring and firing workers. However, the state provides generous financial

support to people who are out of work, while linking such support to measures to

encourage the jobless actively to seek a new job. The unionization rate is high.

Approximately, 90 per cent of workers in the private sector are unionized.

In Denmark, the government plays much more than a „night watchman‟ role.

Denmark, public spending on subsidies and transfers is particularly high, as is

spending on health and education. The role of the state in Denmark needs to be

properly understood. For example, one of the most striking features -business

environment: the stability, transparency and efficiency of their political systems. This

feature is often neglected, but it is one of the most important conditions for the overall

attractiveness of a country's business environment: it is the political system, after all,

which sets the legal and institutional context within which business is conducted.

In short, the Danish approach might be good for stable markets where

everything is known and can be planned ten years ahead, but it is rather different in

Mexico. The recurrent financial crises, the implementation of a neo-liberal policy and

the more recent wave of violence and organized crime due to drug-trafficking „war‟

make the business environment difficult to understand for foreigners as well as local

managers in Mexico.

Methodology

An exploratory qualitative research has been designed to investigate how HRM

practices are supported by organizational culture in a MNC. A case study was used

as research strategy given that it fits well with the maturity stage of the theory

involved and with the relative emergence of the phenomenon under study. This

allowed us to establish detailed evidence and interpretation (Yin, 2009).


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The case study was not chosen randomly; the company was selected on the

basis of being a multinational organization with headquarters in Monterrey, Mexico,

and having innovative processes that contribute to its competitive advantage. Our

interview protocol was designed around these issues: (1) interviewer background, (2)

interviewer access to MNC, and (3) Culture differences (Danish-Mexican) in

management processes and (4) Culture adaptation/adoptions: Danish to Mexican

and vice versa, in management processes.

Sources of data included interviews with a range of informants MNC-Mexican

subsidiary, documentary evidence (official and informal documents), and

nonparticipant observation. As multiple data sources are essential to rigor in case

study research, some observations are given below about each source in the context

of this study.

Collecting data techniques

Although the terms qualitative research and case study are often used

interchangeably, case studies may involve only qualitative data, quantitative data

only, or both (Eisenhardt, 1989; Yin, 1995). Typically, they combine data collection

methods such as documents, interviews and observations, to make a triangulation of

the data, that is, use multiple sources of information on the same object of study, in

order to compare the information collected and draw conclusions more convincing

and accurate (Yin, 1995; Maxwell, 1996; Cea, 2001).

Semistructured interviews. Initial contact with each of the companies participating in

the study was done by an interview with the CEO of the toy company. We explained

the project and asked him to recommend the most appropriate people to be

interviewed. The members selected were people, both for the top management team,

as participants in the key projects for the company middle managers and first line

operators. Overall, our informants included 8 top managers, two of them from the

Danish team working at the Mexico subsidiary, 6 middle managers, 10 first line

operators. At the beginning of the interview, researchers explained to each

participant the general objective. Subsequently, respondent was asked about his/her

professional studies and work experience, so it broke the ice and be comfortable for

the rest of the interview. The most important part of the interview was conducted


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through structured questions, mainly related to culture differences (Danish-Mexican)

in management processes and culture adaptation/adoptions: Danish to Mexican and

vice versa, in management processes. During this part of the interview, in many

cases, researchers had to be made open-ended questions to encourage participants

to discuss their experiences. The interviews were conducted during several visits to

the facilities of each of the companies. Each interview lasted an average of 50

minutes, all were tape recorded and later transcribed. In total, 30 interviews were

conducted to 24 organizational members, during June and July 2010. The interviews

were transcribed verbatim and were circulated among all the authors in order to

construct the full write-up. The interview information was complemented with internal

documentation provided by the firm.

Direct observation. For this case study, direct observation was made casual

proposed by Yin (1995), which was conducted without protocols and preventing the

subjects under study felt they were observed. Observation was developed during the

wait for some of those interviewed, along interviews and presentation of the physical

facilities of the company by any member of it. The presentation of the facilities of the

organization also allowed knowing the physical distribution of people in the company

and the relationships between each of the organizational areas.

External publications and internal communication. For case study as a research

strategy, documents are used primarily to confirm and increase the evidence

obtained from other sources. The documents are useful to verify the correct spelling

of names or titles of institutions that are mentioned in the interview, as well as to infer

issues not previously evaluated (Yin, 1995). For the company information, we

collected secondary data from local and international newspapers, annual reports

and academic journals. This was relevant in order to confirm some primary data from

interviews with managers or other employees and detailed descriptions of corporate

strategies, the new vision, and the logic underlying changes.

Research validity issues. Collecting information from various sources, people or

places, using a variety of methods reduces the risk that the findings reflect only the

biases or limitations of a specific method, which allows a better assessment of the


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validation and generalization of results (Maxwell, 1996). Validation of qualitative data

should be reviewed according to the criteria of credibility or, which is to Yin (1995),

internal validation and transmission capacity (external validation). The credibility is

assured from the triangulation of the categories and the results from multiple primary

sources, and between primary and secondary data sources (Maxwell, 1996).

The transmission capacity or external validation is built based on the

possibility of reproduction in future studies of the results and the models used. The

use of a model in data analysis, both in the generation phase and the phase of the

transfer of knowledge, allows for future investigations in similar contexts, this model

can be applied and the results can be compared with the present study (Yin, 1995).

Analysis

The analysis of this case study was conducted based on the categorization and

contextualization strategies described by Maxwell (1996). The main strategy of

categorization in qualitative research is the codification. Unlike quantitative research,

in which the coding is to apply a predefined set of categories to a set of data with the

aim of generating frequencies in each of the categories, in qualitative research the

goal is to fragment encoding and organize data into categories that facilitate

comparison within and between these categories, and assist in the development of

theoretical concepts.

The strategy of categorization through the coding and constant comparison

was used to analyze data. As an analytical technique, this strategy focuses on

generate and suggest categories so that information obtained from interviews of each

participant of a company to be compared easily.

The first step of data analysis was to transcribe the interviews, notes taken

during the same, observations and useful information of the documents reviewed.

Having the information written allowed having a wealth of data structure, analyze the

information more clearly and compare evidence from different sources (Eisenhardt,

1989). After this step, we constructed a list of categories with their respective code to

support consistency of data in each of the data sources, thus facilitating the

assignment of the categories in the text. Codes are labels assigned to units that give

meaning to the description or inference of information collected during a study (Miles

& Huberman, 1994). The list of categories was first performed during the stage of


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data collection, from theory, research questions and the summaries of the interviews.

This list was modified during the field work and during the analysis.

The strategy of contextualization rather than fragment the data into categories,

attempts to understand the data within a context. Various methods are used to

identify relationships between different elements of the document to be scanned

(Maxwell, 1996). In this study, contextualization strategy was followed for the

comparative analysis of case study through the use of matrices to analyze the

information in a visible and permanent. These matrices facilitated the relations

building.

Results

The company is family owned and share familiar values since the beginning.

Because of its global expansion, the corporation has been making an ongoing effort

to find a balance between global coherence and local adaptation.

Monterrey plant

Operations in Mexico started in middle 1990‟s but the Monterrey plant was opened a

decade later. The Mexican plant is strategically important due to the geographical

proximity to the United States, a big market for the firm. The company‟s machinery

and technology was inexistent in Mexico. Even if the plant has automatic processes,

it has multiplied the number of employees. The plant is labor intensive and generates

high-level employment, hiring technicians and engineers from the local market. When

people with those abilities are not available locally they search in other Mexico‟s

states or send Mexican people to train in Denmark.

Artifacts

The firm‟s subsidiary is located in an industrial park outside Monterrey, Mexico. The

modern building of the corporation contrasts from the other corporate buildings

locates in the industrial park.

Organizational Culture


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Employees at the Mexican plant

value the most…

Mexican values according to

the employees

1. Organizational culture (values,

rituals)

2. Safety

3. Communication

4. Stability

1. Family

2. Equality

3. Honesty

4. Quality

5. Freedom (of expression,

to generate new ideas)

Employees are introduced into the firm culture from the first day at work. One of the

trainings is about the company values and history; so future workers could be able to

seize the corporate way of doing things. Security, quality and the company history

trainings are for every employee. This is very important because it generates a

feeling of identity from the people towards the company. Employees signaled that

they are comfortable working there because they consider their job to be stable. If

employees are responsible, honest and hard working, they may think of a long-term

job:

“One works here, and it feels stable... here they started renting and I

understand that they own [the industrial park] it now… I feel it is not a

company that comes and goes, that‟s how I feel, and that's what they tell me, I

hope to be here more years and look for opportunities…”

One of the key values at the firm is the communication. Most employees

interviewed emphasized communication as one of the cornerstone values. The

company has established a reliable bond, so people can talk up about an error they

made, a complaint about something or someone, or any new ideas they may have to

improve a process or strategy. Accountability is part of the communication process.

The whole company attends to monthly meetings where managers inform everyone

about the performance of the month, give feedback and talk about the next step.

Managers attend workers necessities. For example, once, workers had to walk a long


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way to the factory and some others were not able to take the transport, hence, the

corporation got transportation for them.

At this company, unlike what happens in other factories, people are free to ask

and suggest new ideas that may contribute to the improvement of the company. Also,

discussions are important, because they believe this can get things better. The firm

promotes participation and initiative. Creativity is one of the values as well, and

people are free to experiment. There is a global competition for better practices,

where the best ones are implemented in other plants. Furthermore, the company

assigns responsibility to their employees. Their task is not just to follow orders, but

they are trusted to develop their own ideas and capabilities.

Employees considered the subsidiary like a „big family‟, where bosses care

about the life and happiness of their subordinates. At the recruitment interview, the

recruiter asks them if they have any family and gives them a gift for their children.

There is no distinction between union and administrative workers. Workers value the

closeness they have to the director. While some other companies in Mexico are

highly hierarchical, the firm cares for respect and equal treatment for blue and white-

collar employees, and there is an open-door policy, where any worker can be able to

look for and talk to the manager of the plant, no intermediaries needed.

“Here there is a union, but it is independent and not problematic. Besides, it

does not matter if you are part of the union, here we are all the same,

administrative employees come and ask you how are you, they come close to

you, or if there is a goal to reach or something, they are working with us, or

they let us know when there is a meeting, and tell us about the indicators, the

production, I mean, because there are companies where they don‟t inform you

anything all. ”

People appreciate the environment at the company, and find it to be

supportive. Any issue or problem, they can talk about it and get it solved. Equality is

also shown at the end of the shifts, were everyone (machine operators as well as

managers) is summited to a random revision.


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The enterprise is very exigent with its safety procedures, and no one can

operate any machine without the necessary training. Employees in Mexican

subsidiary highly appreciate safety at work. They receive several trainings before

operating any machine, as well as the necessary equipment for their job. As in every

factory, accidents occur, but workers said there are just slips, like small cuts or slight

burnings.

The company culture demands punctuality, discipline and responsibility and

dishonesty is punished. For example, some workers were stealing some produced

pieces; supervisors discovered this and talked to the people. They also canceled an

event they had been preparing for workers and their families. Since then, supervisors

share this story with the recently hired workers to warn them about the

consequences of dishonesty.

Consumers seem very important.. The company is focused on achieving their

satisfaction. Therefore, they make their employees conscious about their importance,

and how they are not supposed to disappoint them. For the firm, people (as well as

trademark recognition and balance between life and work) are over utility.

For the enterprise, it is very important that each employee understands the

meaning of his or her work. That is why they make everyone conscious about the

final consumer and the client satisfaction.

Rituals are about bonding, integrating people and make them feel part of a big

family. For example, some administrative employees attend to team building

activities, and managers have a two-day annual meeting. The first day is for

information and the second is interactive, with integration and bonding activities. The

firm also organizes events for all people to share and get together. One of the most

significant events is the monthly meeting where everyone is there to know about the

outcomes of the month.

Philanthropy

Mexico‟s plant makes toys donations to institutions and poor children. The company

carefully decides their donations because they want to make sure toys are going to


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be useful as entertainment and learning tools. The firm involves some of their

administrative employees in these give-away events, so they can share the giving

experience. They are about to involve blue-collar workers in donations too, as well as

in other activities like offering some other helpful services to poor people, like

carpentry to fix their houses. In addition, the company has an educational program,

to donate some other things, like computers, to schools near the plant.

Mexico vs. Denmark

Employees agreed that they have to work based on a Danish system; still it is

adapted to the country. Due to the mix of Danish and Mexican practices, one can find

different paternalist practices at Mexico‟s company. Employees agreed that personal

private life is very important for the company. That is, to keep a balance between

work and private life, and respect family time. Some employees said to be thankful

for the gifts –toys- given for their children at the recruitment. They describe the firm

as a human company, which cares for them and their people at home. Mistakes

seem to be allowed, but dishonesty and irresponsibility is punished.

Employees said to have observed a more relaxed safety procedure in

Denmark than in Mexico. The plant in Mexico had to implement clear and specific

rules, so people could feel comfortable at work.

Danish Culture

According to Mexicans, Danish are: According to Mexicans, Mexicans

are:

1. Respectful

2. Honest

3. Punctual

4. Familiar

5. Condescending

1. Sociable

2. Joyful

3. Friendly

4. Undisciplined

5. Responsible

Mexicans find Danish direct, respectful, honest, punctual, self-sufficient,

human-family centered, helpful, trustworthy, nice and happy, not as sociable as

Mexicans, though. Danish living in Mexico seem already adapted to Mexican culture.


Página 18

Danish take private values, like family, to the organization. The company resembles

a big family, where Danish bosses care for employees and their life at home. They

often establish a direct relationship with Mexicans, share and get together with them.

Mexicans have observed Danish consulting their decisions and deciding in

teams. They are exigent. However, they listen, are condescending, and appreciate

people accepting their mistakes and asking about anything they don‟t understand.

Employees feel respected and trusted by Danish, who witness how things are done

in Mexico, and are attentive and tolerant to the Mexican way of doing things, even if

Danish are task-focused and Mexicans, relationship-focused. They want Mexicans to

give their best.

Mexican Culture

The firm employees talked about the Mexican culture, as their own values and

habitudes, as well as what they think Danish think about them.

Mexicans find themselves open, attentive, joyful, sociable, friendly, warm and party-

lovers. Mexicans observe that Danish find them responsible, hard working people,

but still they need “a little push”. Mexicans employees are sometimes undisciplined,

thus they require being monitored by a supervisor: “like a small child, to who you

must say: don‟t do this, and you‟ll have to say it…”. People from Mexico need to get

better in punctuality and communication. The former is demanded at the company

and is part of the Danish culture and the latter is one of the cornerstones at the

Mexican subsidiary. “Mexicans hardly open their ideas and even less in public

forums”. Hence, Mexicans working there need to stop fearing the loss of face, and

start communicating directly, asking whenever they have any doubt, discussing with

the purpose of getting things over, and achieve improvement. Punctuality is another

thing that Mexicans here are working on, and which is demanded and very important

for the bricks company.

Unionized workers are frequently distant and a little afraid of managers. This

could happen because Mexican unions have a strong tradition of being problematic

to managers and sometime to the whole company. Danish culture at the corporation

promotes a respectful and equal treatment towards them, which is not usual at other


Página 19

firms in the country. Some workers said to be surprised by the humility of the Danish

people. They thought they would be rude, but they found them joyful and nice. The

interviewees said to really appreciate the nice and kind relation they have with

Danish.

Dane and Mexican

The plant operation in Mexico is going through an adaptation process. Nevertheless,

it is clear that Danes are looking for people that have a hard-working spirit, and that

want to improve at work and at life. Danish values seem to fit with Mexican ones, like

the family and the private life of people. In both cultures, there must exist a respect

and balance for work and life. Danes are looking for honest and respectful people,

characteristics found in Mexican workers. Mexicans know Danes are exigent, but do

not feel pressured by them. This context presents a challenge to Dane managers,

which they expect of the staff meeting a forum for mutual discussing and agreement.

Directive leadership behavior involves focusing on followers‟ work task: how

they are completed, who does what, when they must be completed, and the

importance of meeting quality and quantitative requirements (Howell et al.,

2007:736). Directive leader behaviors reflect the traditional autocratic patrón model of

Mexican history, where the elite leader maintained a sizable social distance from

followers who were generally complaint and showed due respect and loyalty to the

leader (Howell et al., 2007:736).

HRM Policies and Practices

Management Style

There is striking difference between their way of making decisions and the way

Danes do it. According to the Mexican respondents, Danes take decisions on the

basis of teamwork. They claim that Danish managers repeatedly stress the

importance of group discussion, coordination of actions and the need to reach

consensus when making decisions. In Mexican organizations, decision-making

authority tends to be centralized, somewhat undemocratic, and retained among a few

top-level managers. Factors influencing this centralization include the accepted


Página 20

status differences between managers and subordinates and a clear separation of job

roles (Stephens and Greer, 1995: 43). They are ready to discuss problems openly

and to give and receive feedback. All these confuse Mexicans who describe

themselves as autocratic in terms of decision-making.

HRM policies and practices can be integrated as a core component to the

business‟ strategy, in order to establish, promote and maintain the desired

organizational culture. The company has a clear defined organizational culture based

in its core values. This section will present the most salient findings in terms of

recruitment and selection, and training which were found to be the key HRM‟s

policies and practices to establish, promote and maintain the firm‟s organizational

culture at its subsidiary in Monterrey, Mexico.

Recruitment & Selection

It is argued that in the Mexican context, personal network is an important factor from

both getting a job and to advance in the professional career. The firm recognizes this

aspect and welcomes potential candidates recommended by the current employees.

However, according to the HR manager the most important aspect for the company

is to ensure that the candidate will fix into the organizational culture, and (s) he will

be capable to perform the job. In the HR managers‟ words:

"We do not close the door to anyone! All candidates are welcome, but they

have to follow the standardized process. We do not make a distinction

between a spontaneous to a recommended candidate".

In Mexico, it is not only the issue of whether you are recommended for a job or not,

other concerns could be gender and age, which can be a „problem‟ in finding a job in

Mexico. According to the National Survey on Discrimination in Mexico, two out of ten

persons consider that the main problem of women is the lack of employment,

followed by problems related to insecurity, abuse, harassment, mistreatment and

violence, and discrimination. Health problems appear in a very low percentage

(CONAPRED, 2011: 68). This fact seems to be embedded in Mexicans as a woman

employee at the firm said:

"...given the economy crises I was fired from my previous job. I thought, well

now I am over forty years old, so it would be very difficult for me to get a new

job in another firm. However, a friend who works at the company told me that


Página 21

no matter how old I was, they care more about the experience in production

lines, so I went to an interview and from the first day that I contacted the

manager team at the firm all were very considerate”.

The corporation values the person and what is most important for the firm is trust

within their employees. There is no place for discrimination based on age, gender,

and ethnic background, among other issues that sometimes take place in the

Mexican context1. In this respect the HR manager commented:

“There is no constraint between men and women, older and young. Here we

accept adults, you can join the firm even if you are fifty years old”.

The recruitment and selection process is based on the profile that the company aims

to hire. According to the Monterrey HR manager, these are some of the

characteristics of the profile that managers at the corporation seek in the recruitment

and selection process:

“(1) Emotional stability, (2) secondary studies completed at least (this only

applies for line-production employees), (3) drive to get ahead, (4) well-

established values such as honesty and respect and family, (5) they want to

grow their family, (6) people who want to make a career here”.

The candidate‟s first contact is an external recruitment and selection firm. This firm

follows a standardized recruitment process (interviews and psychological test), based

on core values and profile. If the candidate pass the first stage then, (s)he will have

some interviews with managers. This process varies according to the vacant position.

The objective of this round of interviews is to ensure that the candidates will fix into

the organizational culture. Additionally, the interview also functions as an introduction

to the firm and job, as an employee expressed:

“... They said that it was necessary to make a trip, I was very surprising about

it ... but, I said yes. I was in doubt whether the trip was true or not, because

1 SEDESOL (2011), Encuesta sobre Discriminación en México

http://www.sedesol.gob.mx/work/models/SEDESOL/Resource/1558/1/images/Primer_Informe_Trimestral_2011

%282%29.pdf


Página 22

firms sometimes need to know you before investing on you in a trip. I went to

Denmark, it was a wonderful experience!”

„I think the Mexican universities today are turning out a much higher caliber of people

with middle management potential. They work hard, they are very ambitious, and I

think a lot of them have potential to go into management positions. What I have

found id that [quality concepts work] better with the younger guys than the older

guys. I think there are two generations here. The older guys I was never very

impressed with” (Sargent and Matthews, 1998: 86).

Training & Development

Quality is one of the most important values for the company, which has an impact in

the whole organization, and in particular in the production –manufacturing line. In

order to ensure the quality standards (zero errors, waste, among others), the firm has

implemented different strategies and resources in terms of training & development

programs. A particular training program related to line production employees

emphasizes the manufacturing process. Managers at the production department

place emphasize on the employees the knowledge of material, machine, equipment

and the whole production process for the toys. A manager commented on this:

“Children are of customers, so we make sure that when a product gets in

his/her hands is free of quality problems”.

Production line employees begin their training in Monterrey, Mexico, given by

employees from the main plant in Billum, Denmark. It is interesting to highlight that

Danes thought that Mexicans would understand English give to Mexico‟s

geographical location –border to USA. However, the use of translators was required

given the fact that line-production employees do not understand English.

After the initial training in Mexico, a group of production-line employees

traveled to Billum, Denmark for the second phase of their training program. It seems

that this investment has made a positive impact at the company, as the Monterrey,

Mexico subsidiary was awarded as the most punctual and free-quality problems of

the plants around the world in 2010.

In addition to this, the corporation invests on rituals in order to maintain its

organizational cultural. A line-production employee illustrates:


Página 23

“When we came back from Denmark to Monterrey, the plant was decorated

very nice ... it was like a surprise party for welcoming us! It was a similar

experience when we produced our first toy in Monterrey. We had a little party.

The welcoming and first-brick party has made me feel part of the firm, it is a

nice feeling. From then on, I have not had any problems with anyone, was a

drastic change from what I was doing (former work) what I do now. This job is

very nice, it's like to play to assemble the toy, and you do not miss a piece! It's

very nice work ...”

It seems that the training programs together with the different rituals that the firm has

implemented, in combination to the communication strategies, such as the monthly

meeting, has positively impacted the employees.

Impact of the HRM policies and practices

Recruitment & selection and training seem to be an important element of the

business strategy and in particular to build and maintain the firm organizational

culture. It seems that the employees enjoy their jobs and appreciate the

organizational culture, which has helped to keep almost a zero turnover rate and

absenteeism. The HR manager commented on this:

“We have one percent monthly absenteeism rate, and turnover is less than

one percent. These indicators inform that the firm is working well in Monterrey,

Mexico. At the corporate level (Denmark‟s plant) Monterrey is viewed as the

place to grow. There are very aggressive plans, which are very important to

Monterrey in the near future”.

The HR policies and practices in combination to the rituals and ceremonies seem to

have a positive impact on the wellbeing of the employees at the company. The HR

manager illustrates this finding as follows:

“... People feel the atmosphere, you go through the lines and people are

smiling, but there are things that can be measured as security, we have no

serious accidents, the majority of incidents are cut fingers, a chopper with a

machine”.


Página 24

Concluding remarks

National cultural factors may be determinant in organizational outcomes. For this

case study, we found out that the Danish company has a strong organizational

culture that has permitted it to achieve financial and nonfinancial success. It is

competing with other subsidiaries around the world, and it does not only generate

benefits, but exports HRM practices, being a role model.

Even though both Danish and Mexican cultures are very different, they

seemed to converge. Probably one of the reasons is that a Mexican is directing the

plant. He knows the local culture and has been a bridge between Danish and

Mexican habits, beliefs and values.

It has been important for the HRM to select workers, white or blue collar ones

that show openness and disposition to observe, learn and respect other culture. This

applies for Mexicans as well as for Danish. The former highly appreciates the good

attitude of Danish in guiding them, approaching to them and worrying for them. The

latter had shown respect for Mexican culture and way of doing things, even at the top

management activities.

It is to be said that this adaptation is not about changing the local culture or

the company‟s way of doing things. It is about matching both of them, in order to get

the best of them, even though some changes may occur in the process. For

example, the workers are carrying the company‟s values and habits back home, and

the firm is exporting practices originated locally.

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