Question

Section 2 (12 Marks) [ICLO 2 family-owned carbon steel company from Germany has extended its business to Hong Kong. The owners bought a small traditional Chinese firm and decided to copy the successful structure they had developed at home. This structure was headed by three general managers who equally shared the responsibilities for the business activities of the firm. The consequences were as follows 1. Now the Chinese employees were assigned tasks by people they have never seen before and whom they did not understand. Many misunderstanding occurred, some were quite costly 2. The employees back in Europe were only concerned with whether the assigned tasks were completed and did not consider any other obligations to the Chinese employees such as taking care of the relationships with the Chinese government, banks etc. company The result was that the management model was changed again and a single managing 3. Eventually, the local employees became frustrated and were ready to leave the director of the subsidiary was accountable for all business activities in Hong Kong Questions Analyze the above situation to explain balancing of global standardization and localization of HRM. Discuss the corporate cultural differences in this situation. I. 2.

Answer 1

Q1. The international human resource management models developed in the last decade pursue a contextual analysis of the standardization (global integration) of multinational parent companies' human resource management policies and practices and localization (local differentiation) of host countries' practices. In the arena of human resource practices the human resource strategies have distinctive characteristics that lend themselves to studies of the standardization-localization dialectic. The Chinese systems are based on socialist ideology, which for thirty years has seen a central authority plan the economy, own all major enterprises and dictate managerial action. This stands in stark contrast to the western, capitalist values, concepts of a market economy and assumptions of managerial autonomy. A sense of order, the obligation to the group, the importance of the family, a hierarchical view of society, benevolent leadership with loyal and obedient subordinates, and power only exercised by intellectuals are the main principles of Confucius. Western societal patterns tend to be both more individualistic and more open to conflict and questioning. As a result the management systems and styles diverge in Chinese and western settings. The workers' loyalty is rewarded by the company by providing housing, medical support and life time employment etc. This combined with the socialist economic systems has resulted in large stable, but often inefficient employers. This presents problem to efficiency and best practice orientated western managers who tend to focus on the organisation itself rather than the broader community.

The international human resource management models developed in the last decade pursue a contextual analysis of the standardization (global integration) of multinational parent companies' human resource management policies and practices and localization (local differentiation) of host countries' practices. In the arena of human resource practices the human resource strategies have distinctive characteristics that lend themselves to studies of the standardization-localization dialectic. The Chinese systems are based on socialist ideology, which for thirty years has seen a central authority plan the economy, own all major enterprises and dictate managerial action. This stands in stark contrast to the western, capitalist values, concepts of a market economy and assumptions of managerial autonomy. A sense of order, the obligation to the group, the importance of the family, a hierarchical view of society, benevolent leadership with loyal and obedient subordinates, and power only exercised by intellectuals are the main principles of Confucius. Western societal patterns tend to be both more individualistic and more open to conflict and questioning. \r\n

Q2. All of us global minds have been confronted with cultural differences at some point. They often lead to amusing misunderstandings, but can also have a serious impact on your career. We help you avoid cultural conflicts at work and leave a good impression.

• Differences in Communication

If you have traveled a lot before, you know that there are huge differences in communication between people from one country to another. In some cultures, people are loud, direct or even blunt and tend to interrupt others during a conversation. In others, people are typically soft-spoken, use flowery or indirect language and wait patiently for others to finish their sentence. During a business meeting, these differences are likely to come to the fore. Try to adjust to the way your business partners communicate.

• Valuing Time

Cultural differences also become apparent in differing concepts of time. A popular example: Everyone would agree that Germans are well-known for their punctuality. In many African and South American countries, however, scheduled appointments are often treated like a general guideline rather than something one has to strictly abide by. Seeing how some cultures are more time-conscious than others, it is always best to be punctual at first and simultaneously adopt a relaxed attitude towards time management. Even if you are always on time, your business partners may not take the appointed time for a business meeting as seriously as you do. After a while, you will learn to adjust to your business partners’ unique pace at work.

• Cultural Differences Aside…

There are always a few generally valid guidelines you should pay attention to in order to make a positive impression in the business world. Being dressed appropriately for the occasion and arriving at a business meeting well-prepared are two very obvious ingredients for your success in international business. Whether you are in France or in China, your business partners will appreciate your efforts to make a good impression, regardless of cultural differences. When you fly abroad for business purposes, jet lag is a factor that needs to be taken into account as it might inhibit your professional skills significantly. To mellow the effects of jet lag, try to arrive a couple of days early to give your body enough time to adjust. It may help to set your watch to the new time before you leave and to act accordingly. If at all feasible, this could involve slowly adjusting your sleeping and waking hours to the new time zone. This may seem trivial to you, but a well-slept and alert traveler is much better equipped to deal with cultural differences than someone who is underslept and exhausted.

• Face/Reputation

The reputation of the individual is very important in China. If an action will humiliate someone or ruin a reputation, it is usually avoided. When shame occurs, the person leaves their job or whatever it is that will heal the shame. In Germany, reputations come and go overnight and in the end usually does not matter, the end result is more of the focus. A person is more likely to overlook a reputation to get the job done. China has begun to implement a "social credit system" wherein each individual is assigned a social credit score based on their actions. Negative actions that damage one's reputation such as smoking in a non-smoking area, buying too many video games, and getting speeding tickets, will negatively impact a person's social credit.