Emerging Hrm Issues in China and Analyse the Implications for Multi-National Enterprises

Topics: Human resource management, Culture, Management Pages: 9 (3258 words) Published: April 7, 2013
The following essay will discuss some of the emerging HRM issues in China and analyse the implications for multi-national enterprises (MNE's). Initially, a brief overview of the China's economic landscape will be given and the role that China plays in the global environment will be highlighted. For the purposes of this essay, in-depth discussion and analysis will be on two of the main emerging issues which are the management of culture integration and HRM knowledge transfer in modern China and secondly, addressing the lack of skills and highlighting the importance of retention in China through modern HRM practices. Background information concerning current issues.

Prior to the 1970's, much of the economic landscape in China was dominated by State-Owned Enterprises (SOE's) (Liu, 2003). However, reforms concerning the economy, labour relations, ownership and other social systems in the late 1970s through to the 1980s opened the door to an increase in foreign investment, which mainly occurred through the joint ventures with domestic enterprises (Lewis, 2003). Since then, further reforms developed the opportunity for privately owned enterprises, and wholly foreign owned enterprises to exist in China. Due to these significant reforms, the last twenty to thirty years in China has seen its society shift in a number of ways, firstly, from the country being primarily rural farming and agricultural to urban and industrialised, secondly the economy itself shifting from being ‘rigid' and centrally planned to very market orientated. Thirdly, the transition of domestic enterprises from being state owned allocations systems to representing private and collective forms of ownership. Next, there was an evident shift in the culture in China moving from being a socialist mentality dominated by Confucianism to a more diverse society with emerging capitalist values and greater openness to the global community (Wang & Wang, 2006) These changes according to Selmer (2002) have meant that China has grown into an attractive and important market for international business and this attractiveness has been boosted by China's vast population and its entry into the World Trade Organisation. As China has become inevitably linked to the international economy, it increasingly faces the challenges of globalization which mean enterprises have to adapt to a new, fast-changing environment (Warner, 2008). As such, this type of significant growth for China may hold many implications for managers, because aided by the injection of technology and managerial expertise into China's economic development, China has experienced a significant economic leap forward with increased complexities in people management that have been strongly influenced by political factors, economic factors, and social systems, as well as national culture (Wang & Wang, 2006) . Managing culture integration and knowledge transfer.

The first significant emerging HRM issue that will be discussed is the extent to which cultural differences in China influence the management behaviour of multi-national enterprises(MNE's) and moreover, the importance of cultural integration in a dynamic society. Firstly, organisational “culture” is defined as the norms, values and shared beliefs by employees and refers to individual behaviours which make up how work gets done in an organisation (Hill, 2007). Essentially, it is how a business outcome is achieved by the behaviours of people, and the drivers which produce desired behaviours. Beechler and Yang (1994) suggests that as the gap between the parent country culture and host country culture widens, the likelihood of the MNE conforming is reduced. However, other research by Gamble (2003) suggests that with a cultural gap, MNE's themselves conform to local customs and practices to bridge that gap. In regards to modern China, through analysis of companies such as Orica who have changed areas like recruiting practices to conform to Chinese cultural influences, it...
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