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HRM ISSUES IN CHINA

By,
Shilpa Susan Philip
Kinshoo Shah
Ravi Teja
6/17/2010 1
Contents

• US Expatriate Failure in China


• Issue Under Focus
• Trend
• Cross Cultural Analysis
• Glimpses of Chinese Culture
• Proposed IHRM Strategy & Model
• Benefits -Cross Cultural Training For Expatriate
• Implications for the Firm
• Conclusion
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• Reference 2
Reason for US Expatriate
Failure In
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Few Issues Faced

• Negotiation & Communication Issues


• Cross Cultural Diversity Issues
• Behavioral & Working Style Adjustment
Issues
• Language Barriers
• Life Style Issues
• Ethical Issues in Business

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Issue Under Focus

Managing US Expatriate Failure Due To


Cross Cultural Diversity Issues
In China

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US - Cross Cultural Training Trend

68% Sent Without Training


[Tung, 1982, P.66].

Trained Prior To Departure –


32 % [Tung, 1982, P55-56].

10- 40% US Expatriate


Failure In China

Statistics referenced from AIB-SE (USA) 2010 Annual Meeting report


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US & China- Cross Cultural Analysis
(Hofstede Model)
120

100

80

60

40

20

il sm ce
ua an . ..
id is t vo i ty O
i v D A in
d r ty su
l LT
In w
e in a
Po rta Source ofMstatistics research:www.customerthink.com
ce
6/17/2010
China n World US 7
Glimpses of Chinese culture

Personal
Do not use Snap decisions
large hand contact must Chinese value rank
Punctuality
Tipping is
movements.are considered
be avoided an
isand status. considered
a key.
at all cost
insult insulting.

It is illegal
You should
to give gifts Bowing or
to Looking in the eye
taste all the Use formal
dishes you nodding is
government while addressing
are offered.
is titles.
the common to local
Preference
officialconsidered as lack of greeting.
language
confidence.

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Source: http://www.cyborlink.com/besite/china.htm
Process flow - Identifying HRM Strategy

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KTS-IHRM Strategy
For
Cross Cultural Diversity
Management
(Developed By Shilpa, Kinshoo, Teja)
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11 6/17/2010
Conduct
destination-specific Review
briefing. Expatriate audit , current expatriate
practices.
Inform in Cultural diversity audit
Consider basic advance about the
language training. cross-cultural Refine expatriate Identify the
Complexities selection procedures expatriate
success/failure rates
Provide in-country likely to be faced
before deciding to Identify duration of
support.
relocate overseas. assignment Identify the sources
Provide cross-cultural of expatriates
Feed Back &
• .
training success/failure
evaluation
(Developed by Shilpa, Kinshoo, Teja)
Strategy
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App
roac
h
Bas
d
On
Dur
atio
n
12
KTS-IHRM Model
for
Cross Cultural Diversity
Management
(Developed by Shilpa, Kinshoo, Teja)
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Situational Aspects CCT program

Reasons for previous failures


•Experimental
Evaluate current practices
(intercultural skill)
Cross Cultural style differences
•Cultural assimilator
Soft skill requirements
•Cognitive
Communication skill
•(Cultural awareness &
requirements
interpersonal Skill)
Perception of culture distance
•Social Skill
Type of training being provided
Duration of assignment Managing Cross
Cross Cultural Cultural
Individual Aspects Diversity Diversity
Analysis
Self referencing
Personality OUTCOME
Flexibility Host Aspects
Exposure levels
Communication skill Cross Cultural
Language Business Acculturated
Training & Perceptions Expectations of Individuals
Willingness to acculturate Host Country
Personal aspects
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What All CCT Shall Address

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CCT Program

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Training Program
Concepts Skills Knowledge
Culture -important part of Chinese language proficiency Knowledge of different
identity. - able to negotiate & cultural aspects.
speaking practices.

Communication of cultural •Ability to communicate an Knowledge of behavioral


understanding of culture aspects of different cultures,
•Respect the culture appearance parameters,
•Strengthens relationship. business etiquettes etc.
•Face directed
Communication strategies

Cultural Values & beliefs Ability to recognize culture Knowledge of the effect of
affect understanding & related business problems. religion on business.
acceptance.

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Concepts Skills Knowledge

Non-verbal & verbal Ability to interpret Knowledge of the


communications employee’s verbal & non- significance of common
verbal behaviors in a verbal and nonverbal
culturally relevant manner. communications of different
cultures & speaking
• Implicit communication practices.
• More of a listener
•Focus on insiders

Culture –related stress Possess the social skills & Knowledge of symptoms of
affects efficiency. elicit the employee’s “culture shock syndrome”.
understanding of business
problem.

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Benefits of Cross Cultural Training
US Expatriate

Ability to
To Be Non Reduce Self-
Communicate
Judgmental Referencing
With Respect

Display
Tolerance For Become More Cultural
Ambiguity Flexible Empathy

Reduces Uncertainty Of
Interactions
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Implications for the US Firm

1. Reduced stress & cross cultural shock


5. Reduced Failures & Costs
2. Build new strategic alliances.
6. Increase Employee retention.
3. Superior International Performers 7. Enhanced foreign negotiation
4. Enhance business relationships

Pros
Cons

1. Expensive
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Conclusion

Its high time for US MNC’s to provide its CCT to all its
Expatriates & not just to 32%, in order to:-
Adoption and implementation of KTS- IHRM Strategy
& Model shall help:-

• Better management of cross cultural diversity issue.


• Bring down the expatriate failure’s from 40%
• Obtain greater managerial effectiveness.

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Reference

• Lua, Karel(2001),Expatriatiate management


:Business model for cultural diversity.

• Adler, Nancy, 1981. Re-entry: Managing cross-


cultural Transitions. Group and Organization
Studies, 6, 341-356.

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THANK
YOU…
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