Issues affecting International Human Resource Management in China
“Napoleon called China a sleeping dragon and said
there would be woe to the world when the dragon awakes.
As the world knows, the dragon is more than stirring.”
Introduction
The Chinese believe that the Great Dragon ruled the Middle Kingdom of the world for nearly four thousand years. For most of this period China was a great trading nation. Then the dragon fell asleep for two centuries, while China collapsed under the effects of colonialism, until in 1978 Deng Xiao Ping woke the dragon up. And now the Chinese dragon is back, hungry to take its place as the economic and cultural superpower of the 21st century.
Nowadays China is often called the world’s largest market. Many people might think that it is very easy to start business in China and that success is guaranteed because of the huge potential of the market. But that isn’t true. Making successful business in China is not that easy as it might seem. There are many potential problems which can arise.
For instance the Chinese civilisation is five thousand years old and because of that the Chinese culture, tradition and value system have a significant impact on the different business processes. As the largest country in population, China has 50 plus different minority groups of people each have its own culture, custom, norm, tradition, even unique holidays and languages. Also, as one of the top three nations in land size, China is geographically divided into many regional centres across the nation each has unique cultural aspects in terms of tradition, value, social norm, belief, and organisational features. Those unique cultural factors will present numerous challenges to foreign investors and international joint venture managers.
In this essay I want to discuss issues effecting human resource management which is, according to many foreign executives, the greatest challenge for Western companies in China today.
The significance of culture in international Human Resource Management
According to Hofstede the influence of national culture is important to management for three reasons. The first is political and institutional. There are differences between the countries in formal institutions such as government, legal systems, educational systems, labour and employer’s association, and the way they are used. The secon...
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Joanna Walley-Cohen is a professor of History at New York University and written two books on the subject on China (Exile in Mid-Qing China: Banishment to Xinjiang, 1758-1820 and The Sextants of Beijing.) In this book, The Sextants of Beijing: Global Currents in Chinese History Joanna Waley-Cohen refutes the long held notion that Chinese civilization is “monolithic, unchanging, and perennially cut off from the rest of the world.”(Waley-Cohen BackCover) Although the book lacks visual aides, there are two small maps in the entire book, it conveys her theory well enough and delivers an explanative, meticulous, although boring, account of Chinese history spanning from 200 B.C.E. until 1997 C.E. Ms. Cohen helps us “understand the many levels at which the Chinese across two millennia have used or integrated elements of foreign beliefs or technologies”(Jonathan D. Spence), and gives the reader a “Complling revisionist history of Chinese foreign relations” (Kirkus Reviews).
Langley, Andrew. The Cultural Revolution: Years of Chaos in China. Minneapolis, MN: Compass Point, 2008. Print.
Geert Hofstede’s research in this area has been largely accepted as the standard for understanding culture within nations for study in many different disciplines including sociology and management research, among others. His studies because of their vastness in scale, gathering data from more than ”60,000 respondents in seventy different countries,” makes his research extremely reliable and foundational to research in this area (Hofstede, 1984, 1991, 2001).”
While there are many various global issues that affect the International Human Resource Management to run efficiently, there are two key concepts that play a major role in understanding how to approach them with cohesive and a well coherent strategy; they are the International Human Recourse Management Strategy and Understanding the Cultural Environment. In the International Resource Management strategy, many companies will do their research in finding companies that offer the following:
China grew to be the largest and most populous country of Asia. IT developed a unique culture by being isolated and having little contact with any other civilizations. After time, its methods of production and system of government here highly advanced for its time. China’s history is shown through the ruling of several different dynasties, their schools of thought and religion, and the vast spreading of their culture to its surrounding countries.
Hofstede, G. (1980). Culture's Consequences: International Differences in Work-Related Values. Beverly Hills, CA: Sage Publications.
Doing Business in China How to do Business in China Overview: What is a China remains an untapped market with great growth potential for companies seeking to do business there. Be aware that the Chinese community is weary of companies entering the country because they believe that most companies are there to make a fast dollar. However, if a western company follows a few simple rules and adheres to some cultural outlines, success in China can be achieved. Culture: Building relationships is crucial in China. Also known as Guanxi.
In the article, Cultural constraints in management theories, Geert Hofstede examines business management around the globe from a cultural perspective. He explains how he believes there are no universal practices when it comes to management and offers examples from the US, Germany, France, Japan, Holland, China and Russia. He demonstrates how business management theories and practices are very much subject to cultural norms and values and by understanding these differences, it can give managers an advantage in global business practices.
International Business Review, 2000, Vol.9 (3), pp.345-361. [03 April 2014] 37. Zhu, Y. & Warner, M. (2004). “Changing patterns of human resource management in contemporary China: WTO accession and enterprise responses”. Industrial Relations Journal, 2004, Vol.35 (4), pp.311-328.
China's development is praised by the whole world. Its developments are not only in the economic aspect, but also in its foreign affairs. Compared to other developed countries, China is a relatively young country. It began constructing itself in 1949. After 30 years of growth, company ownership has experienced unprecedented changes.
Human resource is the most valuable and unique asset of an organization. The successful management of an organization’s human resource is an exciting, dynamic and challenging task , especially at a time when the world has become a global village and economies are in a state of flux. The lack of talented resource and the growing expectation of the modern day employee has further increased the difficulty of the human resource function.
This paper is about leading people through a management system called Human Resource (HR), that does more than payroll, design training, and avoiding lawsuits. It provides essential components that will ensure that human talent is used effectively and efficiently to accomplish organizational goals. It is a case study of the Rio Tinto company 's Human Resources global approach after a significant downsizing in 2008.
The rise in China from a poor, stagnant country to a major economic power within a time span of twenty-eight years is often described by analysts as one of the greatest success stories in these present times. With China receiving an increase in the amount of trade business from many countries around the world, they may soon be a major competitor to surpass the U.S. China became the second largest economy, last year, overtaking Japan which had held that position since 1968 (Gallup). China could become the world’s largest economy in decades.
Lewis, Clive (2007) Human resource management international digest. Bradford: 2007. Vol 15, Iss.4: pg. 3.
Miroshnik, V. (2002). Culture and international management: a review' The Journal of Management Development 21(7): 521-544