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Globalization is responsible for the increase in the number of international job opportunities. In the last half of the twentieth century, developments in technology and in transportation and communication systems have catalyzed a process of transfer of manpower across borders.
This process started in the colonial era, but its significance grew with technological advancement. China is an emerging global power. China is pursuing an aggressive trade policy by seeking bilateral trade agreements with as many countries as possible.
In Africa, China is providing grants for infrastructure development and in exchange it takes minerals and agricultural raw materials for its industries.
The country is interested in raw materials for its industries and agricultural products for its growing population. As a result, China through its international investment companies runs operations in various continents.
The aim of this paper is to explore the international HR strategy of China. In order to do this, there is a need to explore Chinese operations in Zimbabwe as a case study.
This will form the basis for examining Chinese policy in Africa and the issues that surround international HR. Further, there is need to examine the effect of these policies both on locals and on expatriate Chinese workers.
Review of the Case
Zimbabwean workers employed by a Chinese firm in Zimbabwe on a state project complained about bad treatment by their Chinese superiors. The project, a military intelligence academy, was the first major trade agreement between the Chinese and the Zimbabwean government.
China offered to build the academy in exchange for Zimbabwe’s mineral wealth. In particular, China wanted a share of Zimbabwean diamonds. The Zimbabwean workers complained that their Chinese superiors abused them physically and psychologically.
Physical abuse took the form of beating meted out to errant local workers. On the other hand, taunts and general mistreatment by the Chinese superiors led the Zimbabwean workers to feel psychologically traumatized. These reports were not taken seriously by the Zimbabwean government.
It appeared that government officials were reluctant to raise the issues with their Chinese benefactors. That said, the workers were reluctant to let go of the construction jobs they held in the construction project.
Unemployment levels in the country were so high that despite the difficult working conditions and low wages the Zimbabwean workers did not consider resigning from then jobs as an option.
This case sets the stage for the discussion on the challenges of international HR. The reasons provided for the difficult relations between the Chinese workers and the Zimbabweans included cultural differences, language barrier, and poor remuneration for the work done.
Chinese working culture differs significantly from Zimbabwean working culture. The Chinese seem more accustomed to working for many hours in a day, exceeding the normal working hours that Zimbabwean workers expected to be on duty.
In the orient, work is a key determinant of a person’s status in society. In Zimbabwe, and much of Africa, status is a function of age and wealth, and not a person’s work ethic.
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A strong work ethic is not necessarily a source of pride. Rather, if the results of that effort show in the creation of wealth, then it attracts status in society.
On the issue of language, the Chinese workers were not conversant with local, languages just like the local workers were not conversant with the Chinese language.
This situation led to many misunderstandings in the course of the project and was the cause of dissatisfaction among both groups. The workers used sign language to communicate. It is understandable why the atmosphere on site would be heated.
Finally, the issue of low wages also created concern for the locals. Their wages were quite low considering they were working long hours. The situation was a precursor to labor problems.
Attraction of Africa for the Chinese
China’s footprint in Africa is increasing by the day. In the last ten years, Chinese firms driven by Chinese loans to African countries have been undertaking huge construction projects in different parts of Africa. A number of factors explain the Chinese interest in Africa. First, Africa is in need of development partners.
The traditional development partners such as the World Bank and the International Monetary Fund (IMF) are difficult to work with in comparison to the Chinese. Western development aid is normally given with conditions based on the country’s human rights record, its fiscal responsibility, and its political processes.
As such, African countries find it difficult to borrow from western countries and other development partners that use the same principles. China on the other hand keeps aid and grants purely economic. It does not ask questions about the internal governance issues of any country.
Therefore, Africa governments find the Chinese less intrusive and easier to deal with as they seek financing to meet their development goals.
Secondly, Africa is very rich in mineral wealth. Some commentators claim that Africa has the greatest quantities of mineral wealth compared to other continents. The historical scramble for Africa by European powers proves this.
Africa actually produces a large quantity of natural resources and mineral wealth consumed by the rest of the world. Africa is also becoming an important supplier of crude oil. The southern and central parts of Africa produce minerals such as diamond, gold and copper, while North Africa is rich in oil.
Thirdly, Africa is the source of timber and agricultural products. In fact, some African economies rely on agriculture as their basic means of earning foreign exchange.
China needs agricultural products to feed its growing population, and therefore it is establishing relationships with African countries in order to have a source of food and agricultural products for its people.
Some commentators believe that Chinese interest in the Renaissance dam in Ethiopia is based on the projections that the dam will transform Ethiopia’s agricultural industry because it will make large scale irrigation a reality. This in turn will assure China of large quantities of food imports.
China’s economy is only second in size to the American economy. This makes the Chinese feel that they are in the right place to assume superpower status. Traditionally, China was a closed society.
The Great Wall of China came up to keep raiders from the North from invading China and it also served as a symbol of Chinese determination to keep to itself. The recent upsurge of Chinese interest in international trade reveals Chinese desire to play a greater role in global issues.
Chinese is busy launching international broadcast services in the countries it traditionally had very little to do with.
Chinese scholarships are available to African students, and China is also setting up cultural centers in countries that it wants to relate to more closely. These activities show that China is interested in becoming a geopolitical power.
Finally, China is doing business with Africa as part of its trade and investment strategy. China needs jobs for its citizens. Therefore Chinese companies launch projects in Africa and as part of the conditions, china exports labor thereby creating job opportunities for its citizens.
In addition, China is making money from the interest it earns from loan repayments by countries it supports. The list of countries that owe China is growing, just like Chinese income from debt repayments is growing.
Staffing Strategies Open to Multinational Corporations
Any corporation that operates in more than one country must have an international staffing strategy. Crossing boarders bring several issues into play, such as legal and regulatory requirements, the need to transfer the company’s corporate culture, and a desire to understand the indigenous culture of the new country.
Kottolli identified four main staffing strategies in use by multinational corporations (1). The four strategies were the use of an ethnocentric approach, application of a polycentric approach, using a polycentric, and an indigenous strategy.
An ethnocentric approach in international HR is the use of a home country executive to head subsidiaries in other countries. This is the most common approach during the early stages of Internationalization.
The main advantage of this approach is that the mother company can feel secure that the new subsidiary is remaining aligned to the strategic direction of the company based on the presence of a home grown professional.
In addition there is a greater chance of success in the transfer of corporate culture to a new territory when the executive understands the operations of the parent company.
On the other hand, this approach can breed resentment from locals especially if the executive is less experienced than local workers. In some countries, it may lead to legal bottlenecks.
The second approach to international HR strategy is the use of a polycentric approach. It is a compromise approach which allows local executives to work alongside an expatriate executive from the home country. It seeks to bring the benefits of the two worlds into the organization.
The benefits associated with a polycentric approach is that it gives the organization a strong strategic position because it provides the organization with the best local knowledge buttressed against international experience. Secondly, it reduces the tension associated with full foreign control experienced by locals.
Similarly, it gives the parent company a feeling of control over the affairs of their foreign subsidiaries. The disadvantage of a polycentric approach is that it sets up the organization for power struggles.
The expatriate executive is likely to feel obliged to pursue business in a manner that closely resembles the operations of the mother company, while the local executive might feel that some of the elements of this approach are not practical, acceptable or effective in the local operation.
Thirdly, organizations can choose to use a meritocratic approach to international HR. This simply means that the best person in the organization heads the subsidiary. This is the ideal way of practicing HR, at least in theory.
The benefit this approach presents to the organization is that it reduces the questions relating to the qualifications and suitability of the executive. Such an executive will command greater respect from all stakeholders compared to one chosen to meet other criteria.
However, using a meritocratic approach does not shield the organization from questions relating to its HR policy. If the best person for the job is from the parent company, then the challenges associated with an ethnocentric system may surface.
Finally, some organizations choose an indigenous approach to international HR. With this approach, the executives of the subsidiary all come from the locality. This approach is very useful if there is political or cultural incompatibility between the two countries.
It hides the foreign face of the company. However, the risk of a distinct corporate culture emerging is higher. This risk translates into a threat when the corporate culture within subsidiaries differs significantly to the point that it affects business processes.
Management Approaches used by Chinese Corporations
The Chinese model of economic support for Africa differs from the models used by western countries and western development corporations. Chinese aid rarely makes it to Africa in form of cash. Rather, China pledges to provide the actual needs African countries need.
For instance, a Chinese loan structured for the construction of a road may not leave Chinese banks. The money simply moves from one Chinese bank to another, where international road constructions companies have accounts.
The construction company uses the money to hire some Chinese laborers and local workers from the lending country to work in the project. In effect, the money does not pass through the hands of the African government where the construction project is underway.
This model of development makes it necessary for the Chinese companies to send their employees to African countries. Since most of the projects are infrastructure related or have very close Chinese interests intertwined with them, the best people to manage them are Chinese executives.
Therefore, the most common model used by Chinese firms operating in Africa is the ethnocentric model. This is more pronounced in government initiated contracts.
Chinese business people who travel to Africa to establish trade relations on their own also end up as the senior most executives of their companies. They may have local trading partners, but usually they will bring in Chinese nationals to take up the executive functions.
Perhaps the biggest barrier to Chinese International HR is the language barrier. There are few multilingual people with a working knowledge of the Chinese language as well as other international languages. This limits the extent of cooperation possible because of the risks that can occur because of the language barrier.
Culture Shock and its Effect on Chinese Workers
Inevitably, Chinese workers across the African continent deal with culture shock as part of the challenges they need to overcome on order to operate effectively in Africa. Chinese workers are accustomed to greater control from superiors based on the political environment of their country.
In Africa, the situation is not similar. Most people are more vocal about their rights because of the years spent in promoting democratic ideals in Africa. Therefore Chinese supervisors tend to view African workers as arrogant and disrespectful. This may explain their resort to force to discipline errant workers.
Africans are generally more social than the Chinese. They live in communities which are welcoming to foreigners, and practice hospitality. The Chinese workers in the African continent may find these overtures suspicious.
For those who are able to see that Africans are simply being social with them, there is a good chance that they will enjoy beneficial friendships.
Politically, Africa is on average about fifty years old since its independence from colonial powers. As such, many Africans are still sensitive to foreign control. Any actions by foreigners that seem to recreate a master-servant relationship are repugnant to Africans.
Therefore, authoritarian superiors end up as very unpopular with African workers. In fact, there is growing disquiet among African workers employed by Chinese firms. Laborers and manual workers think the Chinese are brutal and authoritarian.
This does not auger well with Africans who feel as though the Chinese are using colonialist attitudes in their relationships with locals.
On the social front, some of the Chinese workers living in Africa have engaged in relationships with locals, leading to the birth of children with mixed heritages. This phenomenon will increase of Chinese immigrants moving to Africa to trade. Some of them choose to settle in Africa after the completion of their contracts.
This growing population of Chinese immigrants in Africa will be very instrumental in the future relations of China and Africa. Their understanding of local conditions and language, coupled with their knowledge of Chinese culture and working conditions will make them effective trade ambassadors.
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