Production Networks in Asia and Europe - Essay Example

Globalization of trade opens new opportunities for MNEs to compete in the global market. In this case, the international organization must be responsive to change through people employed by it and the new environment in which it operates.

Without cooperation and information interchange, many foreign companies will fail to perform successfully in China. On the other hand, International Business Studies and International Human Resource Management are the main fields of research that make information available for a wide target audience. Contemporary developments in the field of IHRM suggest that if Chinese companies learn modern management skills from non-Chinese companies and acquire the technology it creates great opportunities for both parties and helps them to overcome national differences and cultural diversity.

The main problem is that modern management skills are truly international and used by many companies around the world. On the one hand, contemporary developments in the field of IHRM "incorporate the broader contextual reality" (Schuler et al 2002:.43). Contemporary developments show that IHRM is that part of the process of management that is concerned with the maintenance of human relationships and ensuring the physical well-being of employees so that they give the maximum contribution to efficient working (Busser, Sadoi, (2003).

On the other hand, non-Chinese companies can stipulate certain norms and procedures of technology transfer in order to protect their privacy rights and industrial secrets. In this case, they can lose their market share but will be able to protect their privacy rights. Technology transfer should be based on strict rules and regulations (Ho, 1997). If the Chinese government refuses to accept such terms, the companies should preserve their interests and limit their sales in China. Included among those factors affecting the company itself are its existing stake and status in foreign markets, its objectives and future plans for foreign markets, alternatives for achieving the objectives, suitability of products for licensing, adequacy of the existing organization, and personnel to handle a licensing program, possible repercussions on the international and domestic operations, and the expected return in relation to effort, resources, and risks involved.

All of these factors must be weighed in determining the feasibility of technology transfer. Moreover, a systematic and thorough evaluative technique should be used on prospective foreign licensees. The best way for non-Chinese companies is to follow technology transfer legislation in order to avoid violation of industry rules knowledge and secrets (Adamson et al 2003). In sum, Non-Chinese companies can transfer technology and management skills if it does not threaten their existence and market position.

For many non-Chinese companies, cultural differences and diversity create great problems and obstacles in China. This becomes of even greater importance when entering into strategic alliances with organizations in other countries; in acquisition situations; when departments in different countries (such as research and development) have to work closely together; when individuals of one country are sent to work in another; and when there is a need to have subsidiaries of various countries commit to a common vision, and common methods and processes.