Discuss About The Comparison Of Critical Success For Historic?
As part of the Australian company that the project has been assigned to me, I have chosen my firm that specializes in IT. The name of the company is TechnologyOne. It is a major software and IT consulting services firm and the country in which the company wantsits business to grow is China.The main reasonforthecountry being China is that it is both, one of the biggest IT markets as well as a hub of Information Technology producing services. The commerce and trade arrangements between Australia and China are quite cordial and friendly and date back to several years.
China’s IT sector has rapidly grown since the new plans and policies were introduced by the government. China’s IT industry has witnessed exponential growth since the past two decades and the sector is now a key contributor to the country’s overall economy.In its recent 5-year plan, China has plans to make IT as one of seven strategic industries which would assist the country in becoming a world-class, high-tech market that is innovation-oriented and away from its cheap-labor outsourcing destination image. Since the past few years, China has also made rapid developments in the IT sector, stirred by foreign investment and several indigenous private firms.
China’s IT sector is very vast and multifaceted and covers a large array of products, firms, and departments. China is well-known to be the manufacturing hub of most of the world’s electronic goods. China has billions of Internet users on mobile and PC platforms and the number is ever increasing. China also has millions of users in social networking and smartphone devices and these are also constantly on growth (Assessment, 2013).
Source: (ChinaDaily, 2013)
China’s IT market is the fourth-biggest in the world in terms of spending. At the present time, it is ranked as the second biggest IT and software outsourcing destination after India. The country’s IT industry is expected to grow by 15 percent annually in the next five years. The four main areas of the IT industry in China are Telecom, Hardware, Software and IT services. The latter two sectors have considerable foreign investment involved and it is advisable for all foreign companies venturing into China to form a partnership with a local firm. China has the largest population count in the world and at an estimated, 1.3 billion people.It has a large market base. The country also has large consumer consumption rates and market research shows enormous potential for almost any category of business in China (Zeng, 2015).
With such huge potential for growth in the IT sector and internet usage, statistics show that the number of internet users in China has grown from 600 million to 700 million in just a year’s time. As per the same data, the overall internet penetration in China has also increased to 48.8% as of now (Moser & Yu, 2014).
The differentiation of various internet users in China can be done on the basis of age, gender, educational qualifications, occupation, location, and income. The key statistics pertaining to internet usage in the country shows that most of the users are from the age group of 10-29 and that there are more male users than females. Urban regions have comparatively more internet users than rural areas and students attending higher education institutions make less demand of Internet when compared to junior or high school students. The main reason behind such data is that high school students have more spare time to browse the internet than those attending higher education or in various occupations. TechnologyOne as an Australian company dealing with IT services is looking to venture into China as a foreign investment destination would need to keep in purview the above data (Jung, 2016).
China is as per its constitution, a socialist state under the people’s democratic dictatorship. The government of China is comprised of the system of congresses and political party system that accords with its multi-party cooperation and political consultation under the leadership of the Communist Party of China (CPC). The people’s parties of congresses, the multi-party collaboration andthe regional ethnic sovereignty and self-governance at the basic level of society together constitute the central framework of China’s political system. China’s multi-party cooperation system and the main political system identify the status and roles of the CPC and other political parties in the routine political life of the country (MacDermott& Mornah, 2016).
China is susceptible to political risks and there exists a strong case fora possibility of nationalization of industries. A similar type of scenario did actually occur in China in 1949. Likewise, there also exists a risk of confiscation, expropriation, contract repudiation andcurrency inconvertibility in the country. It has been witnessed in many countries of the world that currency devaluation and widespread inflation is very like to happen and could cause havoc on the sufficiency of insurance limits as just one of the several problems. In China, there exists a unique form of political risk which is the primary issue of dispute between the country’s central government and provincial governments over theapplicable law (Jung, 2016).
The problem of allocating a decent life quality to all factions of the society in countries such as China is a major challenge. The Chinese government has also been promoting policies such one-child family since 1978 which means that married couples are urged to have only one-child. The positive side of these policies is that such couples are rewardedwith better opportunities and schemes. The Chinese people are very proud of their historical backgrounds and consider themselves as sons of Han (the dynasty that ruled in China). Although, several ethnic groups have been absorbed by the Han Chinese, still now the main rights and cultural benefits are possessed by only the majority Chinese people (Khairullah & Khairullah, 2013).
The Chinese government officially recognizes five religions that are Buddhism, Taoism, Islam, Catholicism, and Protestantism. There are strictly followed governmental regulations on religious groups and worship in the country. Religious believers who do not comply with the state-controlled faith preachments are imposed to intimidation, harassment and even detention. The US Secretary of State even designated China in 2006, as a country of particular apprehension due to the severe violations of religious independence (Moser & Yu, 2014).
The mainstay of the Chinese culture and way of life are the values and components such as family, hierarchical system in social life, self-restraint and cultivation of morality and great importance on hard work and achievement. Chinese culture and society can be described in one word ascollectivist. In China, the familyassumes much more prominence than its individual members. Chinese kids are taught about family values and respecting their elders very early in life. They are given lessons about obedience, self-restraint, and moderation for their elders and family members and must not answer back to them at any cost (Bergsager & Korppoo, 2013).
Power Distance Index (PDI) is a term that explains the extent to which the less potent members of institutions and organizations (the family) recognize that power is unequally distributed. It refers to that how a society’s level of inequality is sanctioned by the follower’s just equivalent to the leaders’. The concept of individualism or IDV refers to how much the individuals are includedin groups. Speaking in individualist terms the societies where individuals are expected to take care of their families are on the individualist side; whereas those on the collectivist side are people who right from their birth are integrated into strong, jointor extended family system who always protect them in exchange for their loyalty. Thus collectivism in this sense refers to the group and not the state (Zeng &Go, 2013).
China and Australia differ significantly with respect to their economic and political systems, social values and regulatory framework, regardless of the considerable changes that have occurred in China since the past few years. Numerous differences do actually exist between the two countries in such aspects. In Power Distanceterms, the scores of China are twice as that of Australia which indicates that China is more centralized with littlesigns of de-centralization, whereasAustralia is highly decentralized. Secondly, Australia ranks high in individualism,whereas China is ranked low in with signs of strong collectivism. Moreover, Australia has a higher ranking than China in masculinity indexthatshows that Australia is more masculine whereas China is feminine. China has ahigher rankingin uncertainty avoidance than Australia, that proves Chinese people are relatively more risk-averse than Australians.Another major point of differentiation between the two is that Australia has a short-term orientation whereas China has along-term orientation (Weir, 2014).
Source: (Beveragedaily.com, 2016)
These cultural differences do impactcertain aspects of management such as cooperative strategies, decision- making, conflict management, work group characteristics and motivation systems. Chinese managers are more likely to bend towards cooperative strategies than Australian managers who place alarger importance on contractual protections than Chinese. Moreover, whenChinese managers are faced with conflicts, they tend to use secondary forms of inspirationwhich involve the aid from a third party, whereas the Australians prefer to use more direct forms (Quer, Claver & Rienda).
The Chinese managers are more likely to averse risky choices than Australian managers. Another point of difference between the two is that Chinese managers give more care to building social and interpersonal contacts than Australians. As far as the motivation systems are concerned, the equity norm is usually ignored in Australian companies whereas it is considerably used in Chinese companies that can even be evidenced by the Australian preference for pay for performance versus the Chinese liking for pay equity amongst employees (Vaux, 2014).
There are some necessary steps that are required to be undertaken to facilitate effective negotiations for the growth and expansion of our new IT business in China. These important tips are relevant to some of the common and prevalent practices in China. For doing business in the country, the knowledge and information about such practices are absolutely essential (Ambler, Witzel & Xi, 2017). Some of these which we as a foreign IT firm venturing in China must keep into consideration are:
Source: (LinkedIn, 2015)
Australia has numerous attractive features whichmake it a top-countryto do a study of HR practices, especially of the MNCs. First and foremost, the country has a long history of legal regulation of HR practices doneby a third party court of law system. Such a legal systemmakes it distinct from many other countries,especially the Anglo Saxon countries. This systemof Australiaand the proximity to Asia marks it as an important country to include in the global study of MNCs. Secondly, there are issues of public procedure around if unique institutional arrangements deter MNC HR practices or lead to innovation and diverse practices emerging in Australian based companies. Similarly, there are issues for Australian MNCs operating overseas, whether they can develop and acclimatizewith these institutional arrangements for foreign-based operations (Liang, 2015).
It would also be useful to compare MNC HR practices in Australia with MNC HR practices within significantly different organized and legal situations.Thisis to be accommodated in the Australian companies and offshore based international study. Australia has an abundance of delegation of HRM practices to downline ministries and the application of strategic HRM policies is better than other OECD countries. As far as HRM delegation is concerned, there are limited features in which central HRunit applies plans which are primarily workplace and senior executive mattersrelated (Qin & Zhang, 2015).
In China, there is more emphasis on management of benefits and preservation of relationships with government agencies that result in comparatively less apprehension for the recruitment and selection methods. Furthermore,in China human resource managersare more trained to choose a candidate based on the prestige of the academic institution attended than on the relevant skills a candidate possesses. The even more essential elements of the Chinese culture like the degree of association with a specific institution is also an important consideration on staffing and selection(Cheema, 2012).
Firstly, for doing business effectively in China, it is important to know the companies that ourlikely partners deal with, toremain aware of the creditworthiness of suppliers and clients. The court system in China is fickle and conventionshere aren’t asstrictly followed as in Australia. Thusit is essential to have knowledge about partners in China especially about those we are dealing with.Doing business effectively in China requiresdiligenceandis a vital step for any company entering into anassociation with a Chinese firm(Bari & Ali).
Second, accounting standards have different implications in China, which imply that inspectingorganizationsinvolve much time and perseverance. Some of the Chinese companies like to pay their bills thatimplies that Firm-A pays Firm-B with debt collected from Firm-Cusing aconcept called as triangular debt. Reckoning overhead expenses for firms in China is tough because sometimes companieskeep retired individuals as theirstaff (Chang et. al, 2017).
Third, Chinese companies also sometimes face issuespertaining to land ownership. Themain issue in this contextis hard to assess because theoretically, the government has official custody of almost everything. The Chinese foreign accounting system is especially difficult to navigate for visiting firms doing business in the country (Chang et. al, 2017).
China is a wide sized market to gain an effective economic growth. It can be seen under the current situation that China will be a better partner in terms of gaining effective growth. There are differences in between the political and legal system. Growth can only be attained if the challenges are met efficiently. The availability of expert technicians and relatively low-cost of manufacturing and labor will help in introducing a significant IT investment destination. It os further suggested that there can be an effective growth in the market helping in systematic growth. The difference in the culture and traditions can be met by developing a bridge and by exploring the investing opportunities in China. The most convenient way to overcome the issue is through meeting public procedure around if unique institutional arrangements deter MNC HR practices or lead to innovation and diverse practices. Similarly, there are issues for Australian MNCs operating overseas, whether they can build up and acclimatize with these institutional arrangements for foreign-based operations. It is possible to gain competent market by hiring a local HR manager to meet the requisite results. In order to gaain competitive advantage it is possible to manage the advantage in the market.
Conclusion
China is a huge market permeated with speedy industrial growth and economicdevelopment. It is the world’s third-biggest trading country after the United States and Germany. In my opinion, China will remain to be a key business ally of Australia. The challenge is that business houses and organizations of Australia docomprehend the variations in the political,economic, and cultural scenario of the country which can be difficult to accomplish and canhamper business growth (Mitra & Zaman, 2015).
China, as most of us know is an IT hub of the world and most electronic products no matter where they are sold, are manufactured here. The availability of expert technicians and relatively low-cost of manufacturing and labor make it a most sought-after IT investment destination. The legal and commercial aspects of the two countries Australia and China are relatively similar, and although there are slight differences in culture and traditions, they can always be adjusted to and it would still be worth investing in this country of enormous potential (Zeng, 2015). I truly believe that our new IT start-up firm in Australia would find it as a profitable investment country and would eventually make it large in the country.
References
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