The field of Human Resource Management
Introduction:
The field of Human Resource Management is a challenging area as every individual is unique and characterized by one’s own set of attitudes, behavior, skills, perceptions and abilities. This problem gets complicated as companies globalize and geographically diversify their HR base to include human resources from a range of economies that differ from each other on the levels of development, labor laws, language and method of communication along with cultural perceptions. Managing these diverse resources in an effective manner so as to play down on the challenges and capitalize on the advantages is a very complicated task. Star Corporation faces number of issues in deciding upon how to tackle the issues which arise out of cultural and institutional differences in doing business with China. Though majority of star corporation’s workers are Chinese little is known about how the Chinese do their businesses and would Star corporation’s Chinese workers accept the working in Chinese mainland is a critical issue especially when it is seen that :
1. Chinese do not plan, they implement.
2. Chinese workers are not concerned with strategies or growth drivers.
3 there is no performance management or evaluation system.
4. Decision making is centralized
5. Business dealings are very cultural and traditional and have to do a lot with humility and language.
Economic cultural and institutional factors:
The economies around the globe are characterized by different cultures and each culture cluster has its own unique set of ideologies, values, beliefs, thought patterns etc. The individuals in the society acquire these cultural attributes through the process of socialization and these play a major role in shaping their behavior and personality as a whole. As Star Corporation globalizes, the workforce gets diversified geographically and culturally and managing diversity has always been a challenging issue on account of varied perceptions and ideologies. The problem gets even further accentuated when the labor laws differ. Doing business in China is a very difficult affair as there is a culture shift. It is often said that the complications that arise when companies operate in different economies and provide employment to varied and different categories of people from different cultural and economic background is the most critical component in trying to estsblish a Chinese entity in China with Chinese workers of American origin . These workers have never been to china and hence would find it not only difficult to culturally accept Chinese functioning. It has been also see that the management of human resources is very critical factor for Star corporation Another key issue for Star Corporation would be to manage the cultural and economic diversity arising out of Star corporation’s expansion plans .
Costs and benefits of the venture location
One of the primary challenges that confronts global companies pertain to the need to balance the dual conflict between the thrust on implementing globally standardized practices across the geographically diversified operations of the company while being responsive, at the same time, to the national conditions
The benefits of setting up operations in China would be very high as everything is localized including the resources. The Americans will have to supply the technical knowhow to the Chinese and all other factors will be taken care of by the Chinese The localization of Star corporation’s venture in china will bring in high cost advantages as seen.. Star will provide the management and technical expertise to run the plant, and the Chinese government will provide the workers and be responsible for paying for all output. Star will receive an annual fee of $1 million and 5 percent of all sales. The most inhibitive factor of localization will be getting the Chinese workers to work in the American style which is known for its equity and performance management styles. Star Corporation will have to turn the Chinese workers to work the American way which could be a great source of worry as language and etiquette have to be mastered. This could involve heavy training costs. The problem can be tackled if there are certain functions which can be laid down as being typically American where the Chinese workers will not be called for. The technical heads will be American and know the style of functioning.
The benefits of getting into this alliance are seen as being much more than the cost of setting up operations and training workers. Though the cost involved in getting the Chinese workers to work in the American style cannot be ignored, the initial learning period could come up with challenges but will settle down as one production period is over .(Ferner a et al 2004)
Recruitment, selection and training the expatriates.
The firm is looking for Chinese expatriates. As companies seek to transfer the style along with the associated HR practices of the parent company to other countries, the existence of the fact that primary strategic decisions pertaining to the subsidiary are taken mainly by nationals from the home country of the company directs the complete behavior of the company operating at the global level. It has been seen in the case of several MNCs that this tradition gives rise to a ‘country of origin effect’ which gets transferred to the foreign subsidiaries of the company in part by the process of deployment of the expatriate staff from the home country in the foreign subsidiaries. However, the transfer of cultural influence is not an easy task. Training on latest technology methods could be one of them as critical factors. Technology tools processes and deployment of Chinese expats could come in for high levels of documentation ad purpose. The compensation should be above industry norms as the success of Star corporation’s Chinese venture would depend upon the Chinese expats. The Chinese expats know exactly how business is done in china and hence the expat should be compensated based on bench mark processes of international human resources as they will fit into the Chinese environment well. They would be the face of the American Star Corporation. Compensation strategies for the Chinese expats must be designed so well that the Chinese expats are not only rewarded for bringing in the very important fit to the organizations but also help in solving so many cultural barriers. Hence the Human resources should look at a totally different reward system for the specialized expats.
Star corporation should look at the following expat salary and compensation suggested
Hardware Development
Manager
Positions based in China 43,500 – 60,000 RMB
Engineering Manager
R&D
Positions based in China 82,000- 109,000 RMB
Operations Manager Positions based in China 32,500-55.000 + incentives
VP of
SCM
Positions based in China 80,000- 105,000 RMB
Lean Manager
–
Electronics
Positions based in China 87,500 + incentives
Project Director
Construction Positions based in China 87,500-113,000
Corporate Secretary Positions based in China 43.00-60,000
VP Human Resources
Positions based in China 76,500- 84,000
GM Sourcing Positions based in China 109,000
Finance & Admin Manager
Positions based in China 22,000 – 46,000+ incentives
( source: http://www.gemini.com.hk/assets/doc/survey_china.pdf)
Conclusion:
The field of HRM is a challenging area as every individual is unique and characterized by one’s own set of attitudes, behavior, skills, perceptions and abilities. This problem gets complicated as companies globalize and geographically diversify their HR base to include human resources from a range of economies that differ from each other on the levels of development, labor laws, language and method of communication along with cultural perceptions. The basic functions of workforce procurement, allocation and effective utilization accentuates as companies expand their operations from one economy to other economies all across the globe.
The field of International Human Resource Management is characterized by an even greater number of issues and challenges as individuals from diversified backgrounds need to be effectively managed so as to achieve the organizational objectives and coordination of the culturally and geographically diversified workforce is a difficult task.
References:
Ferner, A., Almond, P., Clark, I., Colling, T., Edwards, T., Holden, L. and Muller, M. (2004) ‘The Dynamics of Central Control: Transmission and Adaptation of “American” Traits in US Multinationals Abroad: Case Study Evidence from the UK’, Organization Studies, 25(3): 363–91.
Hannon, J., Huang, I. and Jaw, B. (1995) ‘International Human Resource Strategy and its Determinants: The Case of Subsidiaries in Taiwan’, Journal of International Business Studies, 26(3): 531
Kristensen, P. and Zeitlin, J. (2001) ‘The Making of a Global Firm: Local Pathways to Multinational Enterprise’. In Morgan, G., Kristensen, P. and Whitley, R. (eds) The Multinational Firm: Organizing Across Institutional and National Divides. Oxford: Oxford University Press.
Laurent, A. 1986. The cross-cultural puzzle of international human resource management, Human Resource Management, 25: 91–102
