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Potential Market in China

Question:

Discuss about the Human Resource Management at XYZ.

‘XYZ’ is the company that operates in fashion industry and a big manufacturer of fashionable footwear for men and women. It is the firm that is very much established in Singapore and wants to enter the new market of China in order in order to expand the business overseas. As the company wants to send 10 of its employees to manage the operation in China’s subsidiary, it is required to analyse the different trends of that country so that proper training can be given to the expatriates. Examining the various aspects of international human resource management can help the company to have successful operation overseas (Harzing and Pinnington, 2010).

China is the country that falls under the category of ‘developing country’. It is considered as the most populous country with approximate 1.404 billion people living there. Thus, it is a potential market for the company to explore (Chen and Aryee, 2007). It is one of the members of WTO and has largest trading power. The value of international trade of the county is around US$ 3.87 trillion in 2012. World’s second highest billionaires are from China only and thus the average purchasing power of the people here is also good. Country has 56 ethnic groups and Han Chinese is largest in number (Chen and Aryee, 2007). Detailed analysis of the country can be done by using Hofstede analysis.

As ‘XYZ’ is the company that has to establish its operations in the new market thus it is required by the company to make use of international human resource management. It is the concept that deals with the ordinary human resource management practices such as recruitment, selection, staffing etc (Brewster et al.2016). It has been analysed that international human resource management helps the company to manage all the activities as per the culture and condition of the overseas country (Harris, Brewster and Sparrow, 2003).

Job design is about explaining the contents of the job. It is related to design of the tasks and the responsibilities that are being some by the person hired on a particular job position. It is very much related to the organisational structure and culture. This is because the culture of the organisation determines that what tasks need to be done by the person in the company. The hierarchal levels are also dependent on the culture of the particular organisations (Adler and Gundersen, 2007). Below discussion clearly describes the cultural differences in Singapore and China so that XYZ can take initiates to design their job accordingly.

International Human Resource Management

Organisational structure and culture are the aspects that are very much related to each other. It has been analysed that if a companies like ‘XYZ’ has to go overseas than it has to examine the structure and cultural values of the Chinese organisation and have to change their own structure as per the culture of China. As per the discussion of Hofstede model, it has been examined that Singapore and China are somewhat similar in almost all the dimensions (Adler and Gundersen, 2007). Thus, it can be concluded that XYZ dies not need to make more changes in context of their policies and stricture of the organisation.

As  far as the organisational structure of the companies are considered, it has been analysed that China is the country where the organisations are too much centralised and there is unequal distribution of power which is accepted by all. The lower level employees are not considered as the important part at the time of taking managerial decision and they follow what they are told by their managers.

Singapore also shows somewhat similar characteristics in terms of organisation structure. Centralisation of the organisations is very common and here also the employees who work at lower level are not allowed to give their opinions in decision making (Schein, 2010). Mianzi is the culture that has been followed in both the countries but ‘Guanxi’ is the cultural aspect of Chinese people that is more important than the legal considerations in the country. This mean making connection and this is the only way to conduct a successful business in China for the foreign companies. Any of the company that wants to porter in China then it has to understand the important of Guanxi and have to follow the same.

It is the model that helps in analysing the six cultural dimensions of the countries. This model is used to compare the two countries (Hofstede, 2011).

Power distance: It is the extent to which the unequal distribution of power is being accepted by the lower level of the employees. As far as the power distance index of the both the countries have been analysed, China scored 80 and Singapore scores 74. This suggests there is slight difference in the scores and both the countries have the nature of accepting the inequality of power distribution amongst the people (De Mooij and Hofstede, 2010).

Individualism: This is the dimension that deals with interdependency of the members or the people on each other (Dowling, 2008). China scores 20 in this and thus supports the culture of collectivism in which they used to consider the interest of group. Singapore stands on the similar position.

Analyzing Cultural Dimensions of China Using Hofstede Model

Masculinity:

Chins scores 66 in this dimension and thus it has a masculine society. This means that most of the people in China are success oriented and can compromise with their personal life for the sake of work. On the other hand, Singapore scores 48 that mean it is in the middle of the scale. People have balanced nature between work and personal life.

Uncertainty avoidance:

It is the dimension where the society deals with the unknown situations (Armstrong and Taylor, 2014). China scores 30 in this dimension and thus it suggests that people in China are very comfortable with the unknown situations. On the other hand, Singapore scores 8 in this context. The people in Singapore are highly abided by the rules and regulations.

Long term orientation: It is the dimension in which the preferable approach of the society can be measured. As far as China is considered, it scores 87 in this context and this means the Chinese people are long term oriented and also believes in pragmatism (Bond, 2010). Singapore scores 72 which is also a very high score. The Singapore people are also very much pragmatic and believe in long term investment.

Indulgence: it is the dimension that refers to the extent to which the people try to control their desires and needs. Weak control is called indulgence and strong control is called as restraint. China is the restraint society as it scores 24 that is very low in context of indulgence. Singaporeans score 46 in this dimension which is a very intermediate score.

Staffing is the function of human resource management in which the management of the company have to recruit and select the employees for the company as per the job requirements (Collings, Scullion and Morley, 2007). It is not limited to hiring of the person but it also includes activities like induction, training, termination, promotion etc. retention of the employees is also one of the major activities of staffing function or process. In today’s era, human resource of the company can also provide a competitive advantage to the firm over other competitors and thus it is required by the company to make intelligent decision at the time of staffing people. In international context, XYZ the company has to make the balance between the national and international culture and also have to management workforce diversity.

Recruitment is the positive practice that includes advertising of the job vacancy in the organisation. It is the process by which more and more applicants are attracted towards the job availability in the company. As per this case, it is required by the company to recruit people from inside the company as well as from outside the company (Boxall and Purcell, 2011). Thus external and internal, both types of recruitment are necessary to be conducted. The internal recruitment can be done by posting the job vacancy on the online portal of the company and the external recruitment can be done by making use of social platforms. As the company is operating in China thus it has to develop workforce diversity. For this, the company should advertise about the job in Singapore as well as in China. Recruiting people from both the sides help the company to integrate the host country culture with the parent county culture easily.

Job Design and Organizational Structure and Culture

Selections confided as the negative process. This is because; most of the applicants who applied for the job get rejected in this process (Harzing and Pinnington, 2010). This is the process after recruitment where the final candidates who are capable and whose profile matches with the job description are selected. A process starts with screening of the resumes and follows with telephonic round of interview. After shortlisting the people from telephonic round, they need to appear for personal interviews and then the final selection should be done.

XYZ is the company who has to select the candidates for China. In order to select the people from Singapore, other than the job skills, the communication and learning skills of the individual should also needs to be judged. In selection process at China, the company has to look for the candidates who have the capability to adapt themselves with people from Singapore.

Training and development is the process that is to be done to train the employees so that they can achieve their individual as well as aligned organisational goals. In this case, the discussion is about expatriate training (Aguinis and Kraiger, 2009). This training is given to the expatriate so that they can develop the capability to adapt things in the foreign country. It is very compulsory to train the employees before sending them to the new country in order to save them from the situation of cultural shock. Some of the different types of training that should be given to expatriate are:

Cross cultural training: This is the training that helps the expatriates to know about the culture of the foreign country so that when they reach their, they can be familiar with the culture and can adopt it easily (Min, Magnini and Singal, 2013).

Language training: This is also an important type of training as the expatriates who do not have idea about the foreign country language may find it difficult to communicate. Thus, gibing language training to the expatriate is very necessary.

Experimental training: It is also one of the most important training as it allows the expatriate to have small trips to the foreign country where they have to stay for long (Storey, 2007). This helps them to practically experience everything about the foreign land. This facilitates the expatriates to settle down at the place easily (Reiche, Mendenhall and Stahl, 2016).

Remuneration refers to the monetary income and other benefits of the people. Expatriates have to be given remuneration that facilitates them to maintain their status and fulfil their living at the international place (Zhou, et al. 2010). Some of the inclusion of expatriate remuneration includes:

Staffing, Recruitment, and Selection in China

Base salary: This is the basic salary amount that should be equal to the employees who are at the similar position in the parent country. This is because it is the amount that should be fixed as per the position.

Hardship premium: It is the premium amount that needs to be given to the expatriate in order to take the foreign assignments (Boxall and Purcell, 2011).

Allowances:

Different types if allowances are need to be paid for different concerns.

  • Cost of living: it is the allowance that has been paid as per the difference between the expenditure at the place of headquarters and at the foreign place (Warneke and Schneider, 2011).
  • Housing allowances: This needs to be paid so that the expatriate can maintain that living standard as home country.
  • Travel allowances: This is for the travelling purpose for the expatriate (Scullion, Collings and Gunnigle, 2007).
  • Relocation allowances: It is the allowance that has been given as the expatriate is moving away from his home.

Conclusion:

The report concludes that international human resource management is the function of the organisation that allows the company to take decision over some of the employee related issues at international level. In this case, XYZ is the company that wants to enter the China market and thus the cultural and organisational analysis of the country has been done to plan the strategies of staffing. Hofstede model is used to analyse the country with regard to 6 dimensions. The overall discussion suggests that Expatriates have to make some adjustments as per the host country culture to balance the differences.

References:

Adler, N.J. and Gundersen, A., 2007. International dimensions of organizational behavior. Cengage Learning.

Aguinis, H. and Kraiger, K., 2009. Benefits of training and development for individuals and teams, organizations, and society. Annual review of psychology, 60, pp.451-474.

Armstrong, M. and Taylor, S., 2014. Armstrong's handbook of human resource management practice. Kogan Page Publishers.

Bond, M.H. ed., 2010. The Oxford handbook of Chinese psychology. Oxford Library of Psychology.

Boxall, P. and Purcell, J., 2011. Strategy and human resource management. Palgrave Macmillan.

Brewster, C., Houldsworth, E., Sparrow, P. and Vernon, G., 2016. International human resource management. Kogan Page Publishers.

Chen, Z.X. and Aryee, S., 2007. Delegation and employee work outcomes: An examination of the cultural context of mediating processes in China. Academy of Management Journal, 50(1), pp.226-238.

Collings, D.G., Scullion, H. and Morley, M.J., 2007. Changing patterns of global staffing in the multinational enterprise: Challenges to the conventional expatriate assignment and emerging alternatives. Journal of World Business, 42(2), pp.198-213.

De Mooij, M. and Hofstede, G., 2010. The Hofstede model: Applications to global branding and advertising strategy and research. International Journal of Advertising, 29(1), pp.85-110.

Dowling, P., 2008. International human resource management: Managing people in a multinational context. Cengage Learning.

Harris, H., Brewster, C. and Sparrow, P., 2003. International human resource management. CIPD Publishing.

Harzing, A.W. and Pinnington, A. eds., 2010. International human resource management. Sage.

Hofstede, G., 2011. Dimensionalizing cultures: The Hofstede model in context. Online readings in psychology and culture, 2(1), p.8.

Min, H., P. Magnini, V. and Singal, M., 2013. Perceived corporate training investment as a driver of expatriate adjustment. International Journal of Contemporary Hospitality Management, 25(5), pp.740-759.

Reiche, B.S., Mendenhall, M.E. and Stahl, G.K. eds., 2016. Readings and cases in international human resource management. Taylor & Francis.

Schein, E.H., 2010. Organizational culture and leadership(Vol. 2). John Wiley & Sons.

Scullion, H., Collings, D.G. and Gunnigle, P., 2007. International human resource management in the 21st century: emerging themes and contemporary debates. Human Resource management journal, 17(4), pp.309-319.

Storey, J., 2007. Human resource management: A critical text. Cengage Learning EMEA.

Warneke, D. and Schneider, M., 2011. Expatriate compensation packages: what do employees prefer?. Cross Cultural Management: An International Journal, 18(2), pp.236-256.

Zhou, E.I., Lu, Z., Li, X., Li, T., Papola, T.S., Pais, J. and Sahu, P.P., 2010. Remuneration differences in the emerging economies of China and India. International Journal of Psychology, 45(5), pp.360-370.

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