...International Journal of Business and Management December, 2008 An Analysis of Business Challenges Faced by Foreign Multinationals Operating the Chinese Market Jianlian Wu International Management, University of Nottingham Ningbo 315100, China E-Mail: zlixcwj1@nottingham.edu.cn, qqnamei@163.com Abstract China’s rapid economic growth has presented numerous opportunities and challenges for foreign firms there. Many large corporations have established a China centre to coordinate and control their operations in the country. As firms have increased their presence in China, their concerns are increasingly focused on implementing successful management practices and strategies. This article describes the challenges and difficulties that multinational companies faced in Chinese market. It analyses roles played by the human resource function in these China, culture differences, social environment and other factors. Keywords: Challenge, Multinationals, Chinese market 1. Introduction Over the last few decades, the process of globalization has created unprecedented opportunities for global business investment and trade. Many multinational companies are attempting to expand their business international by many entry strategies such as joint venture and subsidiary. While China, with over 1.3 billion population and 9.6 million square kilometers (China Popin, 2008) has become a valuable land for foreign multinational companies. They try to enter the Chinese market by using many...
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...International Journal of Business and Management December, 2008 An Analysis of Business Challenges Faced by Foreign Multinationals Operating the Chinese Market Jianlian Wu International Management, University of Nottingham Ningbo 315100, China E-Mail: zlixcwj1@nottingham.edu.cn, qqnamei@163.com Abstract China’s rapid economic growth has presented numerous opportunities and challenges for foreign firms there. Many large corporations have established a China centre to coordinate and control their operations in the country. As firms have increased their presence in China, their concerns are increasingly focused on implementing successful management practices and strategies. This article describes the challenges and difficulties that multinational companies faced in Chinese market. It analyses roles played by the human resource function in these China, culture differences, social environment and other factors. Keywords: Challenge, Multinationals, Chinese market 1. Introduction Over the last few decades, the process of globalization has created unprecedented opportunities for global business investment and trade. Many multinational companies are attempting to expand their business international by many entry strategies such as joint venture and subsidiary. While China, with over 1.3 billion population and 9.6 million square kilometers (China Popin, 2008) has become a valuable land for foreign multinational companies. They try to enter the Chinese market by using many...
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...Coca-Cola (China), Key Success Factors Analysis [pic][pic][pic] Coca-Cola company from its inception in 1886, has been its delicious carbonated beverage products has swept the world, after enduring 117 years. Coca-Cola entered China in 1927, for some reason after the withdrawal of return to China in 1979, and set up a Coca-Cola (China) Limited. Now Coca-Cola (China) Co., Ltd. has become China's largest beverage joint venture, each of the taxes turned over to the country reached three billion yuan. 20 years, Coca-Cola (China) Co., Ltd. has achieved excellent results, has become a pioneer leader in soft drink sales market is regarded as specimens of the same industry and model. Coca-Cola Company is able to do in China, made such a huge success? Through the Coca-Cola (China) Beverages companies personal work experience, I am deeply aware of: Coca-Cola Company is not only a brand to create a company, but also a base for training and practice, is fast moving consumer goods industry, 'Whampoa Military Academy'. It seeks to create all the conditions for their employees to play the staff expertise to develop the skills of employees, and tap the potential of employees, truly make the best use. Coca-Cola Company is the culture of the achievements of these talented of the brand. Therefore we can say is unique and effective human resources strategy for making Coca-Cola Company to create a spectacular performance, becoming the world's No...
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...THE CHINESE MANAGEMENT Confucius on Management History has shown that China is a significant creator and repository of great philosophies, yet we know little of Chinese philosophies on leadership. With China becoming a global economic and political force, we need to learn from and to understand Chinese leadership philosophies. We must also consider that China is now in the process of blending its tradition, customs and practices with Western concepts and ideas. In the business world, it is the blending of its wisdom and Western practices. Successful leadership behavior of today's more culturally diverse workforce is one of the most important challenges organizations face. CHINA The People's Republic of China today seems to be entering the modern world, coming out of the shadow of the warlords, the 20-year struggle between communism and nationalism, and the Cultural Revolution. Moves are afoot to shift the Chinese economy more toward the market-oriented end of the spectrum. China’s 1978 open door policy initiated rapid economic development, and consequently exposed china to a flood to Western management practices. CHINA 2 China is a country of old and new and one that is in transition. With the rise of China in the global economy, it has never been more important for business leaders to understand Chinese leadership philosophies and practices. Ancient Chinese thinking and Western ideas have shaped the development of leadership styles in China. Leadership theories (paternalistic...
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...paucity of leadership talent, prompting companies to elevate young managers who oftentimes lack the necessary tools but, regardless, are highly sought after by competitors and can change jobs almost at will. By Ed Frauenheim [pic] s vice president of Hyatt International Hotels and Resorts for China and Taiwan, Edward Tai has promoted countless employees during his 34-year career with the upscale hotel chain. In fact, the affable 62-year-old China native says Hyatt often creates elaborate four-year plans to groom up-and-coming execs to head a department in China. But some of those rising stars—and many of Hyatt’s competitors—can’t endure a lengthy development pro¬cess. In leadership-starved China, raiding the competition in search of people who display a shred of managerial potential is all too common. And it’s penalizing executives like Tai, who wants to do things the right way. "By the second year, we do not think he is quite ready," Tai says. "But the other hotel chains, or other places, thinking he is from a Hyatt or a Grand Hyatt, say, ‘He’s ready,’ and give him double the pay and then bring him over." Patience doesn’t always seem to pay off in 21st century China, which for decades had a workforce that made few executive decisions while dining from the "iron rice bowl." The country has smashed that socialist system and is reaping many fruits from a much freer market. There is skyrocketing economic...
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...CRITICAL ESSAY: COMPENSATION EQUITY IN CHINA Hou Guangjian ABSTRACT In China presently, employees receive different compensation according to all kinds of ad hoc definitions of external equity, internal equity and individual equity. Consequently, employee attitudes toward work and social status are affected. If the government would provide people with access to better education, legal measures that guarantee fair competition, and training opportunities to people who have need, the Chinese people would have greater reason to believe that improved compensation equity will be realized in the future. INTRODUCTION Two years after the death of late chairman Mao Zedong, Deng Xiaoping launched century. During the past twenty-five years, the country has witnessed tremendous gains in economy and social wealth in general. Although, on the average, people are leading a much better life, the gap between rich and the poor is becoming larger. As a large developing country in a transition period from a planned economy to a market economy, China at present has to adopt a de facto policy of “letting a few people get rich first” to stimulate enthusiasm and initiative for the rest of the population. Thus, the usual egalitarianism -- what Chinese term the “Large Bowl” -- has been smashed. People working at similar jobs receive different compensation. Various ad hoc definitions of external equity, internal equity and individual equity influence compensation and, consequently, employee attitudes toward...
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...COMPARISM OF HR POLICIES AND PRACTICES IN CHINA AND PAKISTAN INTRODUCTION The introduction of globalization has brought an awareness of the differences in partaking in business activities from one country to the other and from region to region. This is because policies and structures that guide the successful conduct of business activities vary. Human Resource is the most important asset for any organization as it is the source of achieving competitive advantage as well as the development of organisational strategy. In order to succeed, organisations must ensure that they have an effective HRM system in order to achieve organisational objectives. CHINA Name: Peoples Republic of China Population: 1.35 billion Capital: Beijing Largest City: shanghai Area: 9.6 million sq km (3.7 million sq miles) PAKISTAN Name: Islamic Republic of Pakistan Population: 176.7 million (UN, 2011) Capital: Islamabad Largest City: Karachi Area: 796,095 sq km (307,374 sq Major languages: Mandarin Chinese Major religions: Buddhism, Christianity, miles), excluding Pakistaniadministered Kashmir (83,716 sq km/32,323 sq miles) Major languages: English, Urdu, Punjabi, Sindhi, Pashto, Balochi Islam, Taoism Life expectancy: 72 years (men), 76 years (women) (UN) Monetary unit: 1 Renminbi (yuan) (Y) = Major religion: Islam 10 jiao = 100 fen; Life expectancy: 65 years (men), 67 years (women) (UN) CHINA Main exports: Manufactured goods, such...
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...Cristopher Ortega Prof. Ye-Sho Chen GBUS 4040 February 11, 2014 Assignment 1: Managing the Dragon by Jack Perkowski Terrebone Economic Development Authority(TEDA) is the company I chose to talk about and elaborate on China business field. In the article “Bringing a Taste of Louisiana to China While Stimulating Business Back Home” by Gordon Curry we can identify the purpose, mission and services this company provides. This business is about a company with headquarters in Louisiana specializing in the seafood industry, while at the same time searching and exploring for new economic opportunities abroad. TEDA has a great opportunity to establish quality relationship with China, which will be beneficial and convenient since China is a rising economic country and we have to take advantage of that increasing our connections. The main idea is to bring the attention of the Chinese to work on a number of projects, in other word bringing foreign investment. Creating a reciprocal relationship with them so that they can benefit as well as the company itself. Projects include exporting Louisiana seafood to high-end Chinese restaurants, hotels and grocery stores. TEDA is an organization with straightforward goals, which can be found in their online website www.tpeda.org/Goals. The main focus of TEDA is the seafood industry but they are open to other industries to expand, become a big business and enhance competitive advantage with the local community as well as internationally...
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...Germany and China Hofstede’s Five Dimensions Hofstede’s five dimensions are a useful tool to give someone an insight of different cultures. These elements give a country’s behaviour tendencies rather than an exact prescription. There are weaknesses to Hofstede’s Five Dimension theory as it may too easily encourage stereotyping. Even in countries as small as the UK, not all citizens are alike – e.g. it is argued that the culture in the North of England is quite different to the South. Hofstede has also been criticized for being too simplistic; however Hofstede’s theory does give us a general base to work from. 74 countries are listed on Hofstede’s website from which information can be drawn to make comparisons not only between countries but against the world average to give a broader picture. The following graph gives a comparison between Germany and China. It also allows for assessment against the Asian average and World average and our own British culture as benchmarks. Hofstede Comparison: UK, Germany, China Asian Average and World Average [pic] Comparison of Germany and China [pic] Power Distance Index Germany 35 LOW China 80 HIGH Individualism Germany 67 HIGH China 66 LOW Masculinity Germany 66 HIGH China 66 HIGH Uncertainty Avoidance Germany 65 HIGH China 30 LOW Long Term Orientation Germany 31LOW China 118 HIGH Power Distance Index – PDI Power Distance measures equality of power in society and how much people are willing...
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...by developing senior Asian leaders due to decreased staffing costs and better navigation of local culture compared to that of expatriates. That said, significant challenges exist for developing local talent, such as a lack of formal extensive education, Western management skills, and language skills. Advantages of Developing Asian Leaders Asian Trend: Sourcing Locally A Hudson Recruitment survey of 500 multinational companies indicates that 87% of companies do not plan to bring in new expatriate employees in the near future. This strategy is expected to avoid the increasing salary costs and lack of local market knowledge common 2 among expatriate new hires. Trend: Developing talent locally—According to a Deloitte Touche Tomatsu study (n=680), local employees will significantly outweigh expatriate talent in senior management positions in China in the coming years. Leaders at multinational firms expect expatriates to only hold 26% of senior positions that they currently hold. Therefore, to compete with other companies in the future, companies should invest now 1 in developing their local leaders. 2 Expatriates are expensive—The primary driver behind localization of the senior leadership in China is cost savings. Costs of expatriates include housing assistance, relocation costs, hardship payments, compensation, traditional benefits (e.g., healthcare, retirement savings), and non-traditional benefits (e.g., providing for children’s education, commuter assistance)...
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...Introduction This report shall focus on China as the world’s largest emerging market, examining how managerial practice in China differs from Western practice. This report shall attempt to offer guidance to managers operating in China, taking into consideration issues outside their normal experience, for example government regulation and cultural differences. According to Justin Lin, The World Bank's chief economist, China, which became the world's second largest economy in 2010, may become the world's largest economy in 2030, overtaking the United States, if current trends continue. Taking this into consideration we can see that not only is China the world’s main production market but also the world’s centre for consumption. It is crucial that western businesses and managers understand how to do business in China and the issues they may face in management practice in an international and cross-cultural context. Political and regulatory considerations for doing business in China, Anti-gifting regulations in China The giving of gifts is an essential part of Chinese culture (Yang 1988). Personal and corporate gifts accounted for approximately 25% of luxury goods sales in China in 2012. Bain et al (2013) This sale percentage is now at risk as the Chinese government attempts to combat both the act of corruption and a negative view among the population of the behaviour of politicians. As part of the anti-corruption campaign, in July 2012, the State Council passed regulations...
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...the successful experience of the Western, or simply copies part of the management mode from western hotels. Undoubtedly, both the hotel management theories and modes in western countries are advanced and perfect compared with those of China. However, just as Rome is not built in one day, the successful and mature mode is developed and accumulated throughout a long time in Western society. If the successful experience is engrafted directly to China’s hotel industry, confusions and discrepancies will occur essentially due to the cultural differences between China and the West. As the pace of International economic integration goes increasingly faster, China’s hotel industry is facing the challenge of creating its unique management characteristics and choosing proper management modes based on absorbing advanced experiences from the west. In this paper, the cultural effects on the differences of hotel management styles in China and Western countries are discussed specifically from humanity cognition, way of thinking, sense of hierarchy and innovation consciousness points of view, etc. By such comparison and analysis, gaps of management standards can be easily seen between China and West. Then, some theoretical references are proposed as suggestions for the right direction of China’s hotel management methods so as to meet the international standards. 1. Introduction of hotel industry in China China’s dynamic economic growth has attracted business and investment...
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...Comparative HRM: China and Australia * Introduction Over the last few decades, as a rising number of globalisation of business transactions and organisations are seeking to develop and operate in foreign markets, the need for comparative human resource management studies are increased (Brewster & Mayrhofer (eds.) 2012), there are a lot of differences in HRM in different countries and regions, such as institutional culture, organisational structures, recruitment and development and relation of employee (Crystal & Iles 2013). The comparative human resource management provides a better understanding of different national settings on the management task (Hollinshead 2010). Two countries from different institutional and legal systems which are China and Australia will be comparatively analysed in this essay. Firstly, the overview of both countries and culture dimensions will be analysed. Secondly, three HR features will be outlined respectively include culture, organisational structures, and the content of Human Resource Management. in addition, a critical evaluation will be given for how and why these features in these two countries developed in the way that they have. Moreover, a comparative analysis of how HRM has developed in each country will be given, as well as that approach to HRM. * Background and Different Culture between China and Australia The study of the influences of culture is a key role in HRM (Brewster & Mayrhofer (eds.) 2012). Moreover, due...
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...1 Faculty of Economic Sciences, Communication and IT Department of Business Administration Garment Industry Analysis in China Case Study on YiChang Richart Factory Limited Degree Thesis of 30 credit points Service Science LIU XIANG & XING ZHENZHEN Karlstads universitet 651 88 Karlstad Tfn 054-700 10 00 Fax 054-700 14 60 Information@kau.se www.kau.se Supervisor: Lars Haglund 1. ABSTRACT Purpose - In manufacturing industry, China is the most powerful all over the world. The garment industry is one of the most important parts in the market for manufacturing goods. And for the garment industry, China is the largest export country in the world. When we go shopping, we can see a lot of tags about ―made in China‖. Referring to China’s exporting capability in the garment industry, we want to find out why most of international clothing companies choose China as their manufacture market for their production basement. And whether the ―made in China‖ tagged in clothes is influencing consumer behavior or not. Moreover, the authors would like to provide some feasible suggestions on the management for the Chinese garment manufacturers, especially in the labor force problem. Methodology - This paper mainly takes the methodologies of literature review, both qualitative and quantitative analysis in case study, and questionnaire survey. The literatures reviewed here include company articles, academic papers, books, and website information. And in consumer...
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...The McDonaldization of China A Curriculum Project 2009 Fulbright‐Hays Seminars Abroad to China Lynn Guenette Sociology Instructor Rochester Community and Technical College Rochester MN © 2008 NCUSCR • 71 West 23rd Street, Suite 1901 • New York, NY 10010-4102 • (212) 645-9677 • www.ncuscr.org Introduction The author had the privilege of traveling to China on a Fulbright‐Hays study tour during the summer of 2009. While sociologists have been studying the effects of McDonaldization in U.S. society since 1993, few have studied how Chinese society has been influenced by this phenomenon. James Watson and his team studied the phenomenon in 1997 and their book, “Golden Arches East: McDonald’s in East Asia” is an excellent resource for anyone studying this topic, especially the first two chapters. During a lecture at Chongqing University, Professor Zhang Jin mentioned that the idea of Scientific Management was being explored in China during the early 20th century by such business leaders as Lu Zuofu with his experiment at Beibei. This “model society” was implementing the same values in the early 20th century that McDonald’s later touted in the U.S. fifty years later. The author suspected that they had a common ancestor in Taylorism, a business model developed in the U.S. around 1900. Further research found that indeed, they shared that common ideology. Could this be the reason that the Chinese have adapted so ...
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