International Human Resource Management Course Code: IRHR 3540 Course Coordinator: John Dugas Tutor: Tony Ayaz Due Date: Thursday, 21 September 2006 Word Count: 1.675 Country Briefing Assignees coming from Thailand are going to the Netherlands Student name Student number Student phone Thomas Janssen C3063249 +61432672927 Fungai Mutamba C3049368 +61404931268 Tobias Oberascher C3065734 +61416319542
Table of Contents Table of Contents... 2 Introduction... 3 Descriptive Part... 4 Thailand... 4 Historical background of Thailand... 4 Geography and demography of Thailand... 4 Cultural and business practices... 5 The Netherlands... 5 Historical background of the Netherlands... 5 Geography and demography of the Netherlands... 5 Cultural and business practices... 6 Important facts for the expatriate... 6 Analytical Part... 7 Thailand... 7 Essential HR features... 7 The Netherlands... 7 Essential HR features... 7 Conclusion & Discussions... 10 List of References... 11 Further Reading... 11 Appendix... 12-2 -
Introduction This country briefing is part of the company s pre-departure training which is important to ensure a smooth transition of the expatriates and their spouses, families and partners to the foreign location. It aims to provide the employees with all essential information about the home- and host-country s culture, the history and geography, common business attitudes, as well as all aspects concerning human resources. All relevant differences between the foreign location and the home-country will be accentuated to provide the expatriates with the required ability in order to adjust to their new environment and behave accordingly and in a culturally sensitive way. The range of issues covered by this briefing includes an introductive overview of historic and geographic information about Thailand as the country of origin and the Netherlands as the host-country in the descriptive part. In addition, important cultural and business practices are highlighted, as they could create a barrier to the expatriates and the accompanying individuals concerning social integration and behaviour outside of work and the expatriate community. Furthermore, the analytical part exposes appraisals about essential HR features, such as relocation, spouse assistance, training and development, education, labour law and healthcare as well as Hofstede s dimensions. The focus will be on the Netherlands, pointing out all relevant differences. In the conclusive part of this country briefing major HR differences are highlighted again. Eventually, this should enable the expatriate to succeed in the international assignment. - 3 -
Descriptive Part Thailand Historical background of Thailand The Thai kingdom exists since the mid-14 th century and is constitutional monarchy (bloodless revolution in 1932) nowadays. 1 Geography and demography of Thailand Thailand is located in Southeast Asia, bordering the Andaman Sea and the Gulf of Thailand, southeast of Burma. Its capital is Bangkok and the total land area is 511,770 sq km and 2,230 sq km is water. The climate of Thailand is tropical, it s rainy, warm and cloudy with southwest monsoon mid-may to September, and it s cool and dry with northeast monsoon November to mid-march. The population of Thailand, according to the last census in 2000, is 64,631,595. The religions in Thailand are Buddhist 94.6%, Muslim 4.6%, Christian 0.7% and other 0.1% according to 1 CIO The World Factbook, Thailand, 2006-4 -
the 2000 census. Thai is the most spoken language followed by ethnic dialects and English is a secondary language. 2 Cultural and business practices Thai culture is hierarchical and the language itself reflects the level of respect shown to whoever is being addressed. Thais greet by folding the hands whilst bowing the head. Depending on the seniority of the person the head is lowered either more or less. Thais identify with their company and their dress, behaviour and attitude defines themselves and what they represent. "Dress like a slob and you are a slob. Dress like an executive and that is how you will be treated". Good business people negotiate by starting at half the asked fee and mutually agree upon a certain price. 3 The Netherlands Historical background of the Netherlands The Kingdom of the Netherlands was formed in 1815 (after declaring independence from Spain and occupancy of France). In 1830 Belgium seceded and formed a separate kingdom. 4 Geography and demography of the Netherlands The Netherlands are located in Western Europe, bordering the North Sea, between Belgium and Germany. The capital of the Netherlands is Amsterdam. The total land area is 33,883 sq km and 7,643 sq km is water. 2 CIO The World Factbook, Thailand, 2006 3 Doing business in Thailand: the Land of Smiles, 2006 4 CIO The World Factbook, The Netherlands, 2006-5 -
The country has a sea climate with wild mild winters and cool summers. This also depends on the part of the country. Hot summers and cold winters do also appear. The population of the Netherlands, according to the last census on the 1 st June 2006, is 16,491,461 which accounts for 25% of Thailand s population. The religions in the Netherlands are Roman Catholic 31%, Dutch Reformed 13%, Calvinist 7%, Muslim 5.5%, other 2.5% and Atheist 41% according to the 2002 census. Compared to Thailand Buddhists are rare. Dutch is the most spoken language followed by Frisian, which is another official language. 5 Cultural and business practices Owing to limited internal market in a small country such as the Netherlands, businesses consequently try to conquer foreign markets. The density in the Netherlands is very high and therefore, every-day life is structured down to the smallest detail. This means a carefully planned private life and avoidance of uncertainty. The Dutch do not spend a lot of money for extravagant lifestyles or food and only some money is spent for pleasure. Frequent vacations abroad, comfortable houses and safe cars are preferred above luxury items. This is contrary to Thailand where many people dispose of a cook, a maid, a gardener and a driver. As common for an egalitarian society, status and respect are obtained through study and work and not through family ties or old age. Every person is equal and should be treated accordingly. Especially for Thai this may be difficult to understand. 6 Important facts for the expatriate Current exchange rate 1,00 Euro (EUR) equals 41,50 Baht (THB) Time zone UTC+1 (-6 hours from Thailand) Travelling by car Cars drive on the right side of the road 5 CIO The World Factbook, The Netherlands, 2006 6 Doing business across cultures: The Netherlands, 2006-6 -
Analytical Part Thailand Essential HR features 7 As power distance is relatively high, Thais hesitate to challenge their supervisors and prefer acting as a team which they value. Mutual loyalty is expected. Compensation As long-term job orientation is amongst Hofstede s highest Thais deprecate job-hopping in order to improve compensation. Thus, the companies strive to collectively bargain an appropriate salary. Labour law Workers are protected by the Thai labour laws which regulate minimum wages and maximum work hours and days. Health care Recently, employee-friendly benefit plans have been passed by the Thai government which reduces the financial burden on the employee in case of illness or accident. Hofstede s ranking 8 Power Individualism (IDV) Masculinity (MAS) Uncertainty Long-Term Distance (PDI) Avoidance (UAI) Orientation (LTO) 64 20 34 64 81 The Netherlands Essential HR features As mentioned before, Dutch try to plan everything. On the one hand, the individual will take full responsibility in the case of failure. On the other hand, they earn all the respect and credit if they succeed. Furthermore, everything is discussed regardless of status (e.g. the cleaning lady challenges the CEO). This behaviour makes the Dutch unique in the Western world. 9 7 Pacific Bridge Recruiting and HR Consulting in Asia, 2006 8 Geert Hofstede Cultural Dimensions, 2006 9 Doing business across cultures: The Netherlands, 2006-7 -
Relocation When relocating to the Netherlands our company will assist you steeling into your new place. The company has outsourced this service to the specialised relocating company DutchLivingServices to ensure a smooth transition and help you with the following: Finding a place to live according to your preferences. Providing further language training in the Netherlands when required. Helping with administration and mail, since this will be in Dutch. Helping in providing a school for the children there are English schools available that also teach the native language. Helping be involved in social and sports activities. 10 Spouse assistance Job hunting assistance, intra-company employment and on-assignment career support are the options the company will offer. 11 Training and development Before leaving Thailand, this pre-departure training will also offer you the following: cultural awareness program; this is an 8 week program that prepares you in how to react and what to expect in certain situations. You will learn Dutch customs and habits and even taste some of the countries food. Furthermore there will be role-play games that simulate certain situations. language training; since Dutch people all speak English more than adequately, we will focus on improving your English skills. Especially in the Randstad were most people live there are a lot of foreign people. The Netherlands is a multicultural country where people are not surprised when the expatriate does not speak the native language. Education Concerning expatriate language training there are more than 20 schools teaching Dutch which can be hired for additional on-assignment training. The expatriates children can visit school, but important facts have to be regarded as the Dutch educational system is very different to others, and may be confusing to many:. Education on primary school level includes both general education, as well as special education for children with learning and behavioural difficulties. School attendance is compulsory from the age of five to the age of sixteen. 12 Compensation In order to calculate the compensation we use the going rate approach because of: 13 its simplicity, the stable European currency, the identification with the host country, the equality between host- and parent-country nationals, the considerable differences in the GDP per capita (Netherlands with US$ 31,532 vs. Thailand with US$ 2,305) make it difficult to compare and consequently transfer the maintenance of home country living standards. 14 10 Relocation and Immigration Tips 11 International Human Resource Management Managing people in a Multinational Context, 2005 12 Expatica - Living in, moving to, or working in Netherlands, 2006 13 International Human Resource Management Managing people in a Multinational Context, 2005 14 UN Human Development Report 2005, 2005-8 -
This package will compromise: Salary (paid in Euro), COLA (including home leave allowance, education allowance, relocation allowance and spouse assistance) and benefits (including 13th month paid, sabbatical leave, car-leasing, child-care and fitness subscriptions). Since individuals, usually non-resident in the Netherlands, are subject to income tax, agreements with our company will avoid double-taxation. 15 Labour law The expatriate enjoys extended work-time regulations due to the collective bargaining agreement (CAO) between the union and our company. Generally, paid holidays relate to Christian and Dutch public holidays but Thai related religious/cultural holidays will be recognised. 16 Healthcare Recently, the Netherlands s healthcare system has been changed completed, following many other major support systems in this country. 17 Hofstede s ranking 18 Power Individualism (IDV) Masculinity (MAS) Uncertainty Long-Term Distance (PDI) Avoidance (UAI) Orientation (LTO) 38 80 14 53 44 15 Ministerie van Financiën Taxation, 2006 16 Expatica - Living in, moving to, or working in Netherlands, 2006 17 Expatica - Living in, moving to, or working in Netherlands, 2006 18 Geert Hofstede Cultural Dimensions, 2006-9 -
Conclusion & Discussions How we look upon and judge the lifestyle and workplace of other cultures depends on how we view the world from our own cultural background. 19 Especially Thailand s HR background differs considerably from the Netherlands, especially concerning power distance (PDI), individualism (IDV) and long-term orientation (LTO), as depicted in the following diagram. Power Distance (PDI) Individualism (IDV) Long-Term Orientation (LTO) The Netherlands 38 80 44 Thailand 64 20 81 Netherlands vs. Thailand 90 80 70 60 50 40 30 20 10 0 PDI IDV LTO This situation provides opportunity for discussions related to the expatriate s ability to adjust to these differences. The culture briefing and the pre-departure training as a whole are therefore an inevitable means of preparation to ensure that the employee behaves appropriately and adjusts to the new workplace quickly. 19 Doing business across cultures: The Netherlands, 2006-10 -
List of References International Human Resource Management Managing people in a Multinational Context Peter J. Dowling, Denice E. Welch, 4 th edition, Thomson, 2005 CIA The World Factbook CIA Central Intelligence Agency, 2006, https://www.cia.gov/cia/publications/factbook/geos/th.html, accessed September 19, 2006 and https://www.cia.gov/cia/publications/factbook/geos/nl.html, accessed September 19, 2006 Geert Hofstede Cultural Dimensions item International, 2006, http://www.geert-hofstede.com/hofstede_thailand.shtml, accessed September 19, 2006 and http://www.geert-hofstede.com/hofstede_netherlands.shtml, accessed September 19, 2006 UN Human Development Report 2005 United Nations, 2005, http://hdr.undp.org/reports/global/2005/, accessed September 19, 2006 Expatica - Living in, moving to, or working in Netherlands Expatica, 2006, http://www.expatica.com/actual/toc.asp?subchannel_id=1, accessed September 19, 2006 Ministerie van Financiën - Taxation The Dutch Government, 2006, http://www.minfin.nl/en/subjects,taxation, accessed September 19, 2006 Relocation and Immigration Tips http://www.juliaferguson.com/relocation.html, accessed September 19, 2006 Doing business in Thailand: the Land of Smiles http://www.expatica.com/actual/article.asp?subchannel_id=159&story_id=12611, accessed September 19, 2006 Pacific Bridge Recruiting and HR Consulting in Asia http://www.pacificbridge.com/publications.asp, accessed September 19, 2006 Doing business across cultures: The Netherlands http://www.expatica.com/actual/article.asp?subchannel_id=159&story_id=11206, accessed September 19, 2006 Further Reading 2007 Global Compensation Planning Report Mercer Human Resource Consulting, 2006 Non-EU expats adjust to life on the continent http://eee.expatica.com/actual/article.asp?subchannel_id=6&story_id=21258-11 -
Keeping it short: negotiating the maze of Dutch abbreviations http://eee.expatica.com/actual/article.asp?subchannel_id=6&story_id=4790 Europe en route for portable pensions http://www.expatica.com/actual/article.asp?subchannel_id=75&story_id=32899 Dutch social security system explained http://www.expatica.com/actual/article.asp?subchannel_id=75&story_id=1704 Dutch labour laws http://www.expatica.com/actual/article.asp?subchannel_id=75&story_id=30380 What companies look for in their expatriates? http://www.expatica.com/actual/article.asp?subchannel_id=75&story_id=21327 Managing the strain of multiple time zones http://www.expatica.com/actual/article.asp?subchannel_id=75&story_id=16200 Why do so many expatriates experiences fail? http://www.expatica.com/actual/article.asp?subchannel_id=75&story_id=1450 Blog of Expatriates in the Netherlands http://www.expatica.com/actual/toc.asp?subchannel_id=221&name=netherlands+expat+blo g EuRA Directory - EuRA Relocation http://www.eura-relocation.com/bongo.pl/eura.companies/?country=the%20netherlands Appendix Useful checklist 20 When entering the Netherlands for 3 to 4 years the expatriate will need: visa, owing to excess of a 3 months residence (supplied by the company), valid passport, proof of adequate financial means ( 1.264,80 per month for expatriates aging 23), residence permit provide to the local immigration authorities within 3 days of arrival, work permit (supplied by the company), registering with municipality and health insurance. 20 Relocation and Immigration Tips, 2006-12 -