International Human Resource Management in China and Western School of HRM

Introduction

To begin with, it should be stated that the Human Resource Management system in China is regarded to be completely different from the western school of HRM. The fact is that it is stipulated by the various social traditions and different approaches towards running a business. Surely, there are many common features, as western traditions and principles of HRM are transmitted with the western business experience and investments.

It is often emphasized that fifteen years ago the HRM principles were completely different and almost unknown in the Asian region. It is explained by the fact that rare Personnel Managers just were not aware of effective human resource management. The educational sector was helpless. Nevertheless, the shift was mentioned, and managers started recruiting, training, appraising and motivating their employees by the rules and principles of the world HRM practice. However, if Singapore has the HRM faculty, China ignores any necessity of effective education in this sphere. Consequently, most of the traditions are purely American, mixed with traditional representations of worker-boss relations.

Differences of HRM Systems

First of all, it should be stated that the main difference between the Western and Chinese HRM systems is covered in its basis. Chinese HRM is based on the principle of “Open Door Policy”, which was adopted in 1979. The opening of the labor market was aimed at decreasing the unemployment rates; nevertheless, it appeared to be ineffective for business performance. Currently, this principle is still used, however, it is essentially amended: new people are still welcomed, nevertheless, particular claims are provided. (Ashton, Bruton, 2001) Managers are aiming to hire communicable people, which can study quickly, opened to training, stress-resistant, and English-speaking workers. (Bruton, Ashton, 2000) In the light of the fact that managers are looking for people, who can study, speak English, and resist stress, sometimes it appears to be unprofitable to educate a worker, as trained, experienced and English speaking employee becomes attractive for the competitors, and, if they offer a higher salary, the company will lose him or her. From this point of view, it should be stated that the main principle of the labor market in China (which is the essential part of HRM) is the higher salary, but not the opportunity for growth and training. Thus, people often prefer to change the occupation sphere completely for a higher salary. It is stipulated by the fact that the economy is not stable enough, and people prefer a bird in their hands instead of two in a bush. (Ashton, Bruton, 2001)

Hassard and Sheehan (1999, p. 456) emphasize the following notion: “Between 1993 and 1994, the attitude of the senior management in the Headquarters towards management development was changed which was attributed to severe competitive environment. Their two major multi-national competitors were extending their market base in the north, especially in Beijing and Shanghai. The management was well aware of the need for competent managers to combat with serious competition. Nevertheless, the departmentalized culture and the inadequate management system within the Shenzhen factory were widely acknowledged as a major hurdle.” Taking this notion into consideration, it should be stated that cultural traditions are rather powerful in China, and this may be regarded as one of the largest differences in HRM systems. In the USA the key cultural claim is the thirst for profit, while Chinese managers are more humanlike. (Ashton, Bruton 2001)

As for the behavior of workers themselves, it should be stated that initiative workers are highly estimated, however, the expression of personal opinion is considered to be shameful, especially if this expression should be made in front of other workers. This angle of Human Resource Management should be regarded as the main difficulty in the recruitment and motivation sphere of HRM. This specification of Chinese national psychology essentially complicates the development of business corporations according to the western model of development. Thus, Chinese managers should find a way to overcome this difficulty by additional motivation and breaking the deep-rooted cultural customs. (Bruton, Ashton, 2000)

Importance of a Parent Company HR

Taking into account the discussed differences in the HRM systems of the two HR schools, it should be stated that the importance of a parent Company’s HR independent system is rather important. On the one hand, the cultural and political landscape of the country creates particular obstacles and even difficulties. Warner (2004, p. 38) claims that one of the reasons for this importance is the lack of committed and knowledgeable management: “The reliance was mainly on the expatriate managers and most of them were concerned about their own departments. The situation was reflected in a case where a shop floor worker placed the wrong expiry data onto a number of product packages but the Quality Control Department had not noticed it. In the end, the Tasty Food Ltd received complaints from customers, who noted that the product was out-dated, when the product reached the market. It emerged that an operative had noticed the mistake but did not inform her manager.” In similar cases, when the HR Management involvement is required, someone, who knows the team should resolve the problem, in the order, it was the problem resolving strategy, but not the finger-pointing accusation. Consequently, a domestic and autonomous HR system is required for any company, especially in China, where cultural differences within various provinces are essential. The fact is that every department head is aiming to protect the interests of his or her department, and they are not interested in actions, performed by other managers and heads of other departments. (Cooke, 2005)

The fact is that, like Ashton and Bruton (2001) state that it often takes some time for the inculcation of the necessary business system and corporate culture to new workers. Especially it is relevant for the business spheres where high-level services are required. Western HRM system, in its turn, offers sell time for an employee to get adapted to the system, as the competition is more than twice higher, and there is no opportunity to give more time. Moreover, Chinese managers prefer employing people with foreign experience, instead of high qualification workers. Surely, if the HR manager will be from some other company, any problem will not be solved, as he will not have access to all the necessary data and will not be able to sort out the reasons and consequences properly. (Ashton, Bruton, 2001)

Advantages and Disadvantages of Employing Host Country HR Staff

The main advantage of these actions is the notion that Chinese managers will be able to cope with Chinese personnel, by taking into consideration all the cultural, mental, and national particularities of running a business. The disadvantage of this action is covered in the notion that Chinese HR school is rather young, and experience exchange will be required for the effective solution of business problems. (Luo, 2001)

Conclusion

In conclusion, it should be stated that cultural differences between Western and Chinese Human Resource management systems are obvious. Cultural, national, traditional, and mental differences change the business structure essentially. The key differences of these systems are covered in the notion that the Chinese HR system is rather young, as fifteen years ago there was not any notion of Human Resource management.

References

Bruton, Garry D., David Ahlstrom, and Eunice S. Chan. “Foreign Firms in China: Facing Human Resources Challenges in a Transitional Economy.” SAM Advanced Management Journal 65.4 (2000): 4.

Ahlstrom, D., Bruton, G. and Chan, E. 2001, “HRM of Foreign Firms in China: The Challenge of Managing Host Country Personnel”, Business Horizons, vol. 44, no.3, pp59- 68.

Cooke, Fang Lee. HRM, Work, and Employment in China. London: Routledge, 2005.

Hassard, John, Jackie Sheehan, and Jonathan Morris. “Enterprise Reform in Post-Deng China.” International Studies of Management & Organization 29.3 (1999): 54.

Law, K.S., D.K. Tse, and N. Zhou. “Does Human Resource Management Matter in a Transitional Economy? China as an Example.” Journal of International Business Studies 34.3 (2003): 255.

Luo, Yadong. Strategy, Structure, and Performance of Mncs in China. Westport, CT: Quorum Books, 2001.

Selmer, Jan, ed. International Management in China: Cross-Cultural Issues. London: Routledge, 1998.

Warner, Malcolm, et al. Management in Transitional Economies: From the Berlin Wall to the Great Wall of China. New York: Routledge, 2004.

Zhu, Cherrie Jiuhua. Human Resource Management in China: Past, Current, and Future HR Practices in the Industrial Sector. New York: Routledge, 2005.

Zhu, Cherrie Jiuhua, and Peter J. Dowling. “The Impact of the Economic System upon Human Resource Management Practices in China.” Human Resource Planning 17.4 (1994): 1.

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