HUMAN RESOURCE MANAGEMENT (HRM) PRACTICES OF CHINESE MULTI NATIONAL COMPANIES IN THE DEVELOPED COUNTRIESIntroductionMultinational companies generally have their parent companies located in their home country and establish their subsidiaries in their host countries of different cultures. The parent company from a developing country with their subsidiaries in developed countries cannot survive there if it thrusts its own culture and HRM practices unique to its home country. Or for that matter, it is aid that an MNC from a developed country, has to adapt to the local customs and HRM practices in order to successfully run their subsidiaries in developing countries.
This paper seeks to examine HRM practices of Chinese MNCs in developed countries. Before going further, it is worthwhile to have a brief view of cultures and HRM practices of developed countries like the U. S.A and the U. K. as well as China. It will also be examined whether Chinese MNCs have their own country’s HRM practices thrust on their employees belonging to their subsidiaries in the developed countries, follow the local custom and HRM practices or follow a combination of both, through case studies available on the literature.
HRM practices and local culture in ChinaBeing one of the world’s oldest civilisations with 1.3 billion population, China has been under the Communist Party rule since 1921. After Mao Zedong’s dictatorship rule for more than fifty years characterised by stringent controls on daily life and security, his successor Deng Xiaoping who took over in 1978 relaxed the rules by introducing market oriented reforms and decentralised economic decision making without relaxing political controls. China is a nation of diverse ethnic groups, languages, religions and regional cultures with common cultural threads of values and attitudes which hold its people together highly influenced by Confucian philosophy.
Its national culture is characterised by Yin and Yang philosophy and traditional values. Opposites exist but as integral parts of a larger whole. People are reserved, collectivistic and they turn individualistic and expressive depending on the situations. They uphold personal loyalty. They believe in ‘guanxi’ i. e personal networking through extended families, relationships and connections for gaining cooperation and getting things done. They indulge long-term planning by scheming to get psychological and material advantage over their opponents.
The Confucian values they follow are morality, maintaining interpersonal relationship, attachment towards family, respecting elders and maintaining harmony. Communistic legacy is characterised by full political control with liberalisation in economic controls. (Tayeb, 2005)Workers are living and working within a communist structure. Employees who are older do not take bold decisions and without being proactive they shy away from giving personal opinions on any decision. Younger employees are adaptable and are not used to traditional working places. Local Government have their say in companies’ internal affairs such as HRM.
Managers do not take others into confidence while taking risky decisions and they attach more importance to political relationship than their organisation’s goals and how to achieve them. Young managers have the tendency to ensure personal gains before making any decision. Employees display no attachment to their organisations. No concern for punctuality and schedules showing time is not of the essence. Older managers demand respect from younger ones. And age and seniority are accorded priority. (Tayeb, 2005)