International Staffing Policy - Essay Example

International Staffing (Presentation) To secure the company’s success in expanding operations into China, it necessary to develop an international staffing policy that combines the right mix of parent-country nationals (PCNs), third-country nationals (TCNs) and host‑country nationals (HCNs) within senior management positions to ensure that culture and language barriers, foreign business practices, control issues, and home-country values are accounted for in operations. In this respect, the following issues must be taken into consideration: The first are cultural and language barriers. China’s culture and language are important aspects that must be given consideration because of its deep-rooted influence in the nation and among its people, which determines not only the personal lives of Chinese, but their business practices as well. Insofar as international staffing is concerned, this implies a great divergence in values between the home and host countries, especially in terms of language and business practices. On one hand, this can potentially lead to a higher expatriate failure rate. However, on the other hand, certain cultural values also demands particular personal characteristics from potential managers. An example is the Confucian concept of filial piety, hierarchy and respect for age, which requires managers to be at least over forty in order to gain the respect of Chinese staff and local business partners. The second is China’s competitive labour market. With the surge of foreign firms expanding operations in China during the last decade, the demand for qualified local managers has increased, exceeding supply. Thus, foreign firms looking into hiring host-country nationals must compete with other companies to get the cream of the crop. For companies venturing in China for the first time, attracting qualified local managers will therefore be difficult, while retaining them will be an even greater challenge. Last is the growing number of Western-educated Chinese nationals. Labelled as “hot commodities” because of their language and cultural attributes and knowledge of Western business practices, they seem to embody the best mix of competency and culture. Given these realities, the company must therefore adopt a polycentric approach to international staffing in China such that host-country nationals must be recruited to manage the subsidiaries in their own country while parent-country nationals occupy positions at corporate headquarters due to their sensitivity to local conditions. In this respect, the following requirements must be kept in mind: First, because of the intense competition for hiring local managers in China advertisements and job postings must be made well ahead of time; Second, an age floor must be defined for high management positions; Third, given the strong patriarchal orientation, male managers will suit positions high in the chain of command better; and Last, because of the need for managers who are both culturally-sensitive to China’s business environment and knowledgeable in Western business practices, Chinese national graduates from Western business school must also be recruited for mid-level management positions to bridge the home-country and parent-country corporate values. Nonetheless, it is still necessary to recruit expatriates for short-term management positions necessary to establish operations and orient Chinese nationals to the company’s core values and for frequent-flyer assignments to act as consultants once operational. However, qualified expatriate, must be: Adaptable to be to adjust to the cultural differences; A fast-learner to learn key etiquette protocols necessary for dealing with Chinese businesses and managers. Have a ability to understand and respect China’s cultural and business norms; and Possess language skills to facilitate better communication. International Staffing (Report) Effective staffing holds both strategic and competitive significance for firms, such that developing an effective staffing strategy is necessary to ensure a firm recruits individuals who can add value to the company and meet short-term requirements, while still satisfying the company’s long-term strategy. For a company in expanding operations in China, however, the selection process is complicated by the need to develop an international staffing policy that not only finds the best-skilled applicants for the job, but also those who will “fit” into the unique business environment overseas. Hence, the need combine the right mix of parent-country nationals (PCNs), third-country nationals (TCNs) and host‑country nationals (HCNs) within senior management to ensure cultural and language barriers, foreign business practices, control issues, and home-country values are accounted for in operations. As a preliminary step in developing an effective international staffing strategy for operations in China it is necessary to understand Chinese culture, because of its deep-rooted influence among its people, which determines not only the personal lives of Chinese, but their business practices as well. In this respect, Chinese culture can be understood within the context of Confucian ideology, which places a premium on “the importance of society, the group, and hierarchical relationships within a society”, indicating emphasis on rigid rank orientations (Ralston, Holt, & Terpstra, 1997, p.5). Insofar as international staffing is concerned, these ideals create a great divergence between the home and host countries’ business practices. Thus, as most foreign companies venturing into China experienced, cultural barriers make it impossible “to transplant Western management methods and values and expect local staff to adapt” (Yuet-Ha, 1996, p.28). On one hand, these cultural differences make it difficult for expatriates to adjust to new environments. As research shows, expatriate performance overseas is negatively affected the gaps between host and home country cultures, such that the greater the clash is between the two, the higher the rate of expatriate failure (Earley, 1987, p. 686). Given the distinct differences between British and Chinese cultures, this indicates a potentially high expatriate failure rate, implying the need to lessen the number of expatriates sent to China and decrease the length of their stay, as well. As Richards (2003, p.3) suggest, firms must eliminate urban myths such as “the need to have the an expatriate as the top finance person or that the HR person must be a fluent English speaker or can speak the company's home language” in developing the company’s overseas workforce, explaining that thriving firms often give up control and cut back their expatriates for successful operations. On the other hand, cultural differences also demand particular specifications from top managers to be effective in operations, including not only an individual’s values, beliefs, expectations, and cultural backgrounds; but also specific personal characteristics such as age, gender, language skills, and attitudes (Erbacher, D'Netto & España, 2006, p.184). For example, Chinese culture places a premium on family relationships, which in business is translated to rigid rank orientations and hierarchical relationships, thereby demanding loyalty and respect similar to filial piety towards the “father” of the company. This implies a respect for age in Chinese culture, such that older employees are important in order to gain the respect of high-ranking government officials and business executives, as well as patriarchal leanings of Chinese business cultures indicating that top positions are often best reserved for male managers (cited in Johnson, 1998, p.52). In developing a staffing policy for operations in China, however, it is also necessary to understand China’s competitive labour market, where due to a surge of foreign firms expanding operations in China during the last decade, demand for qualified local managers has increased, exceeding supply (Chen & Martin, 1996, p.26). For foreign firms looking into hiring host-country nationals, this means competing with other companies to recruit employees, which entails offering higher salaries and better perks (Johnson, 1998, pp.53-54). One possible solution to China’s shortage of talented managers is the growing number of western-educated Chinese nationals, which companies can hire straight from western colleges in countries like the United States, Australia, and the United Kingdom. Labelled as “hot commodities” because of their language and cultural attributes and knowledge of Western business practices, they seem to embody the best mix of competency and culture, overcoming the cultural shock expatriates may experience, while fulfilling the competency requirements expatriates may have over locally-trained Chinese managers (Chen & Martin, 1996, p.27). However, as foreign companies learn, the real challenge in building a local workforce lies in retaining local talents, such that foreign firms must be prepared to offer competitive remuneration and training programs to keep turnover rates low and local managers satisfied in the company. Given these realities, the company must therefore adopt a polycentric approach to international staffing in China such that host-country nationals must be recruited to manage the subsidiaries in their own country while parent-country nationals occupy positions at corporate headquarters due to their sensitivity to local conditions (Perlmutter cited in Bartlett, 2004, p.64). This eliminates the difficulties Western managers encounter when managing Chinese staff, while ensuring that management decisions regarding critical aspects of business operations will be sensitive to local conditions and be received by local consumers. Expatriates must therefore be limited only to certain positions where they are necessary such as short-term management positions required to initially establish operations and orient Chinese nationals to the company’s core values and frequent-flyer assignments to act as controllers once operational (Richards, 2003, p.3). However, to prevent expatriate failure, the ideal expatriate, must be possess “cross-cultural” skills and “relation abilities” such as “intercultural communication” and “intercultural sensitivity” abilities, which cannot be acquired in the short-run (Erbacher, D'Netto & España, 2006, p.184). In this respect, ideal candidates must be adaptable, to be to adjust to the cultural differences; a fast-learner, to learn etiquette protocols necessary for dealing with Chinese businesses and managers; have a ability to understand and respect China’s cultural and business norms; and must also possess language skills to facilitate better communication. The chosen expatriate must also have a high “degree of internationality”, as well as the willingness to relocate in order to avoid cases of cultural shock, upon expatriation (p.184). In choosing local managers, on the other hand, certain requirements must also be kept in mind. First, because of the intense competition for hiring local managers in China, advertisements and job postings must be made well ahead of time to ensure that the right candidates are chosen for the job. Second, an age floor must be defined for high management positions to comply with the Chinese culture’s rigid rank and hierarchical inclinations. Third, given the strong patriarchal orientation, male managers will suit positions high in the chain of command better. However, female managers must also be considered for middle management positions given their flexibility and receptiveness to new ideas (Johnson, 1998, p.54). Last, because of the need for managers who are culturally-sensitive to China’s business environment and knowledgeable in Western business practices, Chinese national graduates from Western business school must also be recruited for mid-level management positions to bridge the home-country and parent-country corporate values (Chen & Martin, 1996, p.27). References Chen, M., & Martin, D.W. (1996). Mountains of gold. The China Business Review, 23(3), 26-29. Earley, Ch. P. (1987). Intercultural training for managers: a comparison of documentary and interpersonal methods. Academy of Management Journal, 30(4), 685-698. Erbacher, D., D'Netto, B., & España, J. (2006). Expatriate success in china: impact of personal and situational factors. Journal of American Academy of Business, 9(2), 183-188. HR role crucial in expatriate search; Are Western expatriates in China a dying breed? Lance Richards finds out. (2003, June 21). South China Morning Post. p.3. Johnson, M. (1998). Beyond pay: What rewards work best when doing business in China. Compensation and Benefits Review, 30(6), 51-56. Perlmutter, H.V. (2004). “The Tortuous Evolution of the Multinational Corporation”, cited in Bartlett, C., Ghoshal, S.B. & Birkinshaw, J., Transnational Management: Text, Cases, and Readings in Cross-Border Management. 4th ed. (pp. 61-70). New York: McGraw-Hill/Irwin, 2004. Ralston, D. A., Holt, D. H., & Terpstra, R. H. (1997). The impact of national culture and economic ideology on managerial work values: a study of the United States, Russia, Japan, and China. Journal of International Business Studies, 28(1), 177-207. Yuet-Ha, M. (1996). Orientating values with eastern ways. People Management, 2(15), 28-30. Read More