School of Management and Economics Course Code: FED 344 Strategic Management in Dynamic Organization Master Thesis
How to survive as an expatriate in China?
A case study based on three companies: IKEA, NCR and Texol
Anders Hytter Marja Soila-Wadman
Kamila Karcz Rongzhi Liu Joanna Adamska 820504 840818 820128
Tutor: Marja Soila-Wadman
The increase of foreign direct investment in China has resulted in the presence of a number of Western expatriates working in Sino–foreign joint ventures. These expatriate managers have to make things work in absolutely new settings. Therefore, without cross-cultural trainings, they may have very stressful experience in China. Understanding of the Chinese culture and Chinese society may ultimately save much frustration and money. With our thesis therefore we would like to explore how companies manage training processes before sending expatriates to China, and prepare them for further knowledge transfer to the employees in China. This has lead us to the following research question: “How do the Western companies manage process of sending expatriates to China?” The research is based on the experiences of three companies: IKEA, Texol Technical Solutions and NCR and demonstrates possible means that can be engaged by the companies to facilitate adjustment processes of their expatriates in China. The empirical data were gathered from interviews with managers from the mentioned companies. In order to analyze our empirical findings we present literature that was structured as follows: Training in the international context, training in the Chinese context and communication between expatriate and local employees. Both the literature review as well as our empirical data with analysis aspire to provide the reader with an in depth study of the importance of the selection of the right candidates and the provision of trainings, as it can help both to understand the unique Chinese cultural and business characteristics environment as well as efficiently to operate in China. In our conclusions we present our findings regarding the following issues: support for the expatriates; training of the Chinese employees and importance of communication. Based on our analysis we introduce our recommendations for the three companies, including: Selection of the right candidates, presence of action plans, motivation and incentives, trainings, contact with the company and other expatriates during the assignment and importance of repatriation. 2 effectively and
This master thesis had been written in the spring semester 2006, for the program “Strategic Management in Dynamic Organization”, within the School of Business and Economics, Växjö University. The research process is challenging and interesting, and would have not been completed without help from those who participated. Here, we would like to express our thanks to those who supported us in the research journey. First of all, we would like to thank the interviewees, offering us empirical data. Even though they are remaining anonymous, we really appreciate their help, time and willingness to engage in interview and questionnaires. Furthermore, we would like to express our thankfulness to Marja Soila Wadman, our tutor, for her support during the process of writing the thesis, and also Jerzy Kociatkiewicz, who has given us valuable suggestions. They both have had a major impact on the development of our ideas and given constructive feedback during seminars and meetings. Finally and especially, we really appreciate all of the classmates in the seminar, who had taken time to read our thesis and provide useful suggestions to improve it. We hope the readers will enjoy the chosen topic and be interested in our findings.
Växjö, May 24, 2006
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