Cultural context and its affect on management practices in organizations - a special focus of compensation practices

Abstract

Management practices are carried out in organizations which operate in some sort of environment. The environment is basically divided into two types: internal environment and external environment. In both these environments culture constitutes the main part. Thus, in order to fully comprehend the management practices in organizations it is utmost necessary to understand the cultural context of that society in which it operates. Many management practices if enforced without taking into consideration its cultural context may not yield the expected results. Similarly a management practice which might be very effective in one culture may not be so in another cultural context and thus fail to realize its full potential or may be a total failure in some other cultural context. This is not to be assumed that the management practices are wrong or ineffective but it might just lack acclimatization of those management activities in accordance to its cultural context. The same is true for compensation practices which are one of the most important HR practices both from the perspective of employer as well as employee. If compensation practices are not aligned with the internal and external cultural context the result will be inefficiency. Hence, for management practices to be effective and efficient the first and foremost duty of managers and social experts is to understand the cultural context in which those practices are applied otherwise the result will be disappointing. This is of great significance for developing countries where many of the management practices are adopted from the west without its proper adaptation to its eastern culture resulting in discouraging results and at times utter failure for the management.