Critical Aspects of HRM in the Australian Context – Role of Culture in Strategic HRM Practices

Managing a multicultural workforce is a critical component that helps an organisation to maintain its competitive edge. As globalisation eases cross-border barriers such as labour mobility, the occurrence of a workforce that is culturally diverse has become a common occurrence in many countries (Seymen 2006). In Australia, the multiculturalism aspect in the workforce is widespread with approximately 40 percent of the Australians being either migrants or descendants of migrants (Patrickson & Hartmann 2001, p. 199). The role of migrants in the country’s workforce is further buttressed by the lack of adequate skills among the indigenous Australians due to the significant obstacles they encounter that decrease their participation in the country’s education system, thus reducing their relative rating in terms of skill as compared to the migrants (ABS 2000, cited in Patrickson & Hartmann 2001, p. 199). Further contribution to the multicultural characteristics of Australia is the high number of foreign entities holding a significant role in furthering the country’s economy. Dowling (2005) for instance notes that “the top 500 foreign companies employ 4.2% of all employees and account for 12.3 % of total revenue of all Australian companies” (p. 204). Such impact of the foreign companies has also extended to the transfer of HRM practices from entities with foreign origin, despite the highly regulated industrial relations in the country (Purcell, et al. 1999; Walsh 2001). Analysing the HRM management practices in Australia with respect to cultural diversity, D’Netto and Sohal (1999) note that the practices lack a sound basis in such aspects as recruitment and subsequent talent management. Lack of sound cultural diversity management strategies, implies that organisations resident in the country may fail to benefit from opportunities that a culturally diverse workforce presents.

Cultural diverse workforce presents opportunities that better the human resource achievement of a strategic role in the organisation. For instance, project teams that have members from different cultural backgrounds have been suggested to arrive at more effective solutions than teams whose composition is homogenous with regard to culture (Seymen 2006). According to Iles and Hayers (1997), such arises from the widespread opinions that are brought on board leading to the establishment of innovative solutions to the challenges facing the organisation. Cultural diversity may however present a challenge to achievement of the organisation strategy when it is not effectively managed. Bhadury et al. (1998) and Dadfar and Gustavsson (1992) for instance argue that the effective management of cultural diversity is what ensures an entity reaps the positive benefits of the diverse workforce while mitigating the challenges that could arise with a diversified workforce. One aspect where cultural diversity could for instance adversely affect the organisation’s outcomes when mismanaged is lack of an effective cultural communication strategy, which in turn results in alienation of some of the members of the organisation (Seymen 2006). In the Australian context, one study for instance identifies the oversight accorded to communication skills as an important characteristic determining managerial staff selection (Bambacas & Patrickson 2009). Such oversight could affect the ability of the resultant professionals to address issues of cultural diversity where effective communication is an important component determining success of the HRM strategies. go to part 6 here.

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