Discuss about the International Human Resource Management for Foreign Direct.
The literature is about a foreign investment of a US based company, Xikron, in China with an aim of increasing its retail store’s number. The company plans to resource there managerial employees from the United States which will subject them to more responsibilities in order meet the company objective of expanding the business.
The investment project in China is accompanied by the following economic, political and social impacts
The following are some of the economic factors effects that are achieved from Xikron’s store in China:
Over the past years, China has existed as a key recipient of a good destination to foreign direct investment which accounts for 27% of the production added value, 4.1% of revenue from national tax and foreign trade being at 58%. China has hosted investments from about 190 countries from the world nations including 450 of the world’s 500 fortune companies. Most conducted surveys reveal that a high number of companies investing in China originates from the US with an intention of serving the domestic market of China but no exports are being taken back to the states of America. This eventually increases the foreign direct investment quantity in China.
Xikron investment in China shall similarly lead to increased expenditures originating from housing and health allowances. Additionally, the company shall also spend more on compensation packages to employees working abroad who might be exposed to many risks.
Expansion of Xikron store to China encourages local market competition as the new foreign investment shall find other domestic investments in the market. The domestic investments shall thrive to effectively compete in order to survive in the market. This will eventually result in improved products and services to country citizens as a whole. In contrary, it might also result in unhealthy competition to the domestic companies as competing a foreign company might pose a challenge due to foreign funding and management.
Extension of Xikron investment to China may lead to an introduction of new technology within the country of China as the company shall be operating on technology that could not be existing in the country. This may result in development and adoption of a modern technology and management skills to the china workforce. Chinese workforce shall learn from the positive managerial and work conduct behavior from foreign workforce originating from the United States.
The emergence of a new company and foreign employees to a foreign country like China will lead to increase income from foreign investments and employees. The company and the employees shall be exposed to higher foreign tasks in order to operate and compete in the China domestic market. This will greatly generate income to the country through tax.
The engagement in business between USA and China through Xikron company investment in China will help improve the existing political relationship between the two countries. This is achieved through political engagements and joint agreements aimed to enable a friendly environment for conducting business. The general outcome shall aid both countries in understanding the importance of good inter-country relations in creating a good business environment aimed at attracting other foreign investments
Xikron investment to the China market will motivate the China government in maintaining political stability within the country in order to encourage the existence of the foreign investment since they form a good source of income through tax and source of industrial learning.
Social factors effects
Generally, being a Chinese is not based on race but rather the concept of culture. In addition, to be a Chinese, an individual has to behave and adopt or accept the cultural values of the China citizens. Often, Chinese refer themselves as Han or Sons of Han and according to history; almost all small foreign ethnic groups that interacted with the Han Chinese have attempted to acquire the culture of Chinese and joined the idea of living. This process has consistently been observed despite the legal measures enacted to protect the culture and rights of the foreign culture. Hence, this process might be complicated and challenging to achieve by the foreign, US workforce, in order to comfortably fit the China market.
China as a nation possesses one of the most complicated cultures though it is believed by many scholars that despite various communities’ existence, they share most common characteristics or features. This complexity in cultural values originates from pervasive influence from the Confucian Chinese culture philosophy which forms the primary core of a Chinese identity. This idea has widely conquered the Chinese living style for a very long duration of time and its almost impossible to take them out of the influence despite more than two generations interacting with British society hence making it the greatest business challenge for Xikron investment and its employees in order to promote its foreign business ideas, products and services.
It’s only five official religions that are recognized in China by the Chinese government which includes: Islam, Buddhism, Taoism, Protestantism, and Catholicism. The government consistently regulates the religious groupings and worship. Foreign faiths and believers who would wish to practice their faith through worship within the country are subjected to intimidation, harassment and or detentions by the Chinese government. This religious acts and regulations might enact fear to the foreign employees from the United States since they won’t be at liberty to practice their native faith and worship making it challenging effectively delivering allocated business duties and objectives.
Cultural factors are generally measured in five distinct dimensions which include: collectivism against individualism, masculinity against feminity, avoidance of uncertainty and long-term orientation. These are the commonly used concepts of measuring and comparing differences in cultures between two nations or many. In relation to this, it is observed that China and US possess very contradicting cultural ideologies under each dimension as discussed below. These pose a significant complexity to the visiting workforce in China.
China as a country possesses a formal and hierarchical form of social structure such that everybody is aware of where he or she fits ion the structure and to conform to the rules within the distinct structure. In addition, crossing into other areas is prohibited or not allowed whereas in America the structure is way more informal and open. it is very common to witness individuals from a different social structure or social levels socializing and sharing ideas about each other. There exist limited lines of restriction restricting social classes. The two differences in the social cultures between the two countries may result into challenges and problems in a case whereby parties engaging in business or a visiting culture are not aware of the prevailing culture in a given country.
When planning to conduct a long-term business in China, it is very necessary being aware of the mechanisms employed by Chinese in handling and approaching issues as these mechanisms might be controversial to those applied by Americans. Chinese are highly frowned by direct conflict or confrontation approach to handling issues.
In China, Chinese prefer looking at a group or collective participation more than individualism unlike in the US who are widely known for their individualism campaign which has occasionally formed a source of conflict with other conflicting cultures which encourages collectivity or group participation. An individual from China will frequently look at how his or her action affects a group more than how it affects them on an individual basis.
In China, individual’s reputation or opinion is very important. In circumstances where someone’s action might ruin or humiliate an individual’s reputation, the action must be highly avoided. During the occurrence of shame, the affected individual sacrifices the job or intended task or action in order to heal from the shame unlike in the united states where shame is not a big individual since they consider it to be short-lived and disappears within a night from occurrence.
Socialization is a high expectation when conducting business in China. Knowing each other well and better forms the key concern while conducting business. It is thus acceptable whenever knowing each other delays a business or contract process as long the social time is allocated during the business process unlike in the US where business partners or associates know limited information about each other and are comfortable doing business in the prevailing environment.
Morals of people in China are a great concern to the Chinese. Marriage is prohibited unless in the late 20s. In addition, teenage dating is not allowed and punishments and education to the young adults are normally conducted. In the US the morals and mode of self-conduct are less of a concern to the citizens making the culture more relaxed with limited relations restrictions.
Chinese always do honor the dead and affected families pay recognition to the dead through visiting the sites of the graves of an ancestor to pay respect once a year making it an important norm in the Chinese culture. This makes a significant contract to the kind of culture in the United States where the majority of the citizens know little information about their ancestors and where they are laid.
In the Chinese setup, success from one’s business or personal life is normally downplayed whereas in the US successes are highly lauded. Humility is widely considered or acknowledged as a symbol of weakness. This is a significant issue that defrays intercultural relations as it is very sensitive to actions and comments in another culture presence.
In relation to meetings and deadlines achieved, most Americans are normally very sensitive. All concerned parties usually avail themselves prior to the setup time for a meeting. In contrary, Chinese do not normally regard time to be absolute but rather as a suggestion and similar believe is applied to deadlines.
In Chinese culture, sensitivity to persons or individual needs is considered very important. Respect to another person is of great demand as well as good treatment. A person’s needs are satisfied are met at the sight. This is contrary to the US culture where respect to another person is not considered a priority.
Conclusion
The following course of actions should be adopted by the Xikron management with an aim of managing the institutional effects on the human resource practices in the China subsidiary
Management of Institutional effects on Human resource practices
Xikron Company should prefer obtaining employees from both China citizens educated in the United States and its employees who work within the US. This will aid in incorporating the objectives of the company that involves both distinct cultures of the US and China enhancing the success of the investment.
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