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Our firm has set out to Internationalist its operations by opening to different acclivities One in China Assembling and Maintaining Aircraft Engines and the other in Europe fabricating turbine blades for Aircraft engines. We have shown in the case of China the key strategies required for Organizational success and we have identified that success in China is assured if the Firm can get its strategy of Recruitment and Retention right.
We have also identified that expatriate managers which are core to the operations of the facility must have a fit with the Chinese environment and as Internationally mobile employees must have an indented understanding of the ultra and societal norms of the Chinese people thus be enabled to manage employees to achieve success. In locating our facility in China, we chose to locate it the Shanghai area as this area is key to the aviation industry of China and has an abundance of Key Skilled and Competent people even though these people are in short supply.
We have articulated a strategy for ensuring commitment and loyalty from our staff. Our Europe facility is located in the I-J. We have identified the UK as a suitable location because of the abundance of the required technical skills as well as the flexible and business friendly labor laws. Even though the cost of labor is higher than some Eastern European countries, we believe that this is overshadowed by the quality of the work we would get, access to the global markets as well as the stability of the UK which is essential to the aircraft industry as delays on orders leads to very losses for all concerned in the Industry.
The Auk’s tax structure for business is also less stringent than comparable European economies and Airbus Industries with its main factories in France is much closer to the UK than most Eastern European countries. The issues we identified with Human Resounding in the SKI is mostly in the rear of ensuring Equal Opportunities and Union/Labor Relations. The I-J has very strong Unions and the laws allow the formation Of Unions for willing employees thus managing this strong Unions will be one key task for HER Managers in the UK facility.
We have shown in the two facilities that HER is an integral part of the organization structure as its strategic inputs are required to guide organizational direction, visions and strategy. AIRPLANE ENGINE ASSEMBLY AND MAINTENANCE FACILITY INTRODUCTION The Peoples Republic of China is a one party state with Power centralized in the Chinese Communist Party. Though a Communist state their have been significant capitalist models applied in the certain areas of National development mainly the Economic, Industrial and Financial sectors.
This liberalizing of certain sectors has led to substantial growth in the Chinese economy with average “Real GAP growth rates of between 2001 and 2006” (source: Global Insight, 2007). The “Open Door Policy” adopted by China in 1979 has brought about enormous growth in the industrial output as well as the economy as a whole. As the country moved away from its “iron rice bowl” system consisting of state-owned enterprises and “lifetime” workers, various types of employment untactful agreements have begun.
The past two decades have witnessed the rapid growth of Chinese and foreign owned multinational enterprises which are set to play an increasingly important role in the future of the global economy. The opening up of the vast market has created many opportunities and, at the same time, many problems to foreign enterprises. Because of the unique political, economic and cultural environment in China, it is difficult for foreign joint ventures and wholly owned foreign subsidiaries to introduce their preferred approach in managing the employees and the organization in China.
This has highlighted a crucial issue for international companies to be aware of the cross-cultural implications in the conception, design and implementation of the various market entry strategies for the Chinese markets, especially when considering the Human Resources Management strategies since Corporate Strategy will in turn determine the Human Resource (HER) strategy to be deployed. China graduates about 1. 5 million students from institutions Of higher learning each year.
This large pool of graduates are of varying quality and those with scientific and technical degrees are very much in demand thus here is a shortage of Skilled and graduate engineers in the Chinese market. This has led to intense competition amongst firms trying to secure these persons employment loyalties. Potential employees, having more choice in the labor markets need to be assured of the value of working for the various firms and thus Compensation and Benefit models need to be well structured.
As a Wholly Owned Foreign subsidiary in the Chinese market Our Rare Engine Assembly and Maintenance firm will encounter significant challenges as a Greenfield start up within the Chinese markets and our Human Resource Strategy will be key to competitive advantage. To achieve this objective of basing our Competitive advantage on our Human Resources, there is a need for us to answer the following questions: What are the key employment issues likely to be encountered in the Chinese market? Based on the identified employment issues, what key principles of HER strategy would we suggest?
What strategy are we going to deploy to manage our key skills within the firm? What other HER related issues should be considered within the Chinese EMPLOYMENT ISSUES IN CHINA The principle statute that governs employment and labor issues in China is he 1994 Labor Law. The Ministry of Labor and Social Security occasionally promulgates rules and regulations that supplement the law. Apart from National legislation, foreign enterprises in China are subject to Labor regulations of the area in which they operate.
In June 2007, China’s parliament passed a new labor contract law requiring employers to, among other things; provide written employment contracts to their workers. To be implemented on January 1 2008, the law will require employment contracts to stipulate minimum wage and safety regulations. They must also be drawn up within a month of starting work. The new ruling will apply to both domestic and foreign firms, except for foreign representative offices in China. These new labor laws though good for the Chinese worker do not necessarily guarantee success for a Foreign Investment Enterprise (FIE) in China.
There were roughly 460,000 approved foreign companies in China at the end of 2003 (Chou, Lu and Kiang, 2005). Many of these 460,000 firms discovered that human resources management is different in China (GHz and Dowling, Summer 2000). CENTRAL GOVERNMENT INFLUENCE Some reasons adduced for the difference in HARM practice in China are Hough the country has significantly embraced market led business practices, central planning still exists in certain areas I. E. A government run mandatory personnel file system, a single labor union for the whole country and restrictions on city migration (Desert, 2006).
CULTURAL ISSUES Secondly the issue of culture and cross cultural sensitivities are critical to success of an HE in China. Many HER practices commonly used in western countries being introduced through the operation of foreign invested enterprise in China, do not take cognizance of the cultural and social backgrounds in China. These cultural norms include: Preserving “Face” in Public (Chin in 1 995 refers to face as a combination of dignity, self respect and prestige, one’s social standing and position as perceived by others). Another norm is the concept of Guiana.
This concept is defined as “relationships that imply a continued exchange of favors which need not be founded on friendship” (Chin, 1995). The concept of time for the western manager is sequential, in short supply and strictly limits the amount of time he can afford to give to others while Chinese culturally view time as synchronicity, in abundant supply and boarding to person relationships (Trampers, 1993, Chapter 9). The above norms as regards Chinese culture have been ascribed to “Confucian work dynamism” as studied by Bond and his colleagues (Brewster et al, 2007).
The Confucian work dynamism basically shows that countries with high Confucian work dynamism are generally long term oriented with a focus on the future, thrift and persistence. There is evidence that these cultural issues are gradually being better managed in the workplace with the adoption of training and career development programmers, and a closer linkage between personnel strategy and business strategy. EXPATRIATE STAFF MANAGEMENT The issues associated with expatriate staffing include inadequate selection methods and the lack of attention to cultural adaptability of the expatriate staff and family.
Research has shown that a number of FIEFS in the Chinese markets send out expatriate managers without any prior cross cultural training. The other issues encountered include the management of repatriation after the overseas assignment with issues ranging from limited continuity in International assignments, and difficulties of adjusting to more specialized and less autonomous positions at home, lack of career prospects and under ululation of the International experience. Management succession in the case of sudden expatriate manager departure and balancing the local and expatriate staff at Chinese FIEFS can also be a problem.
Finding local managers with strong managerial skills in the areas such as problem solving, decision making and management Of human resources could also be difficult as more foreign multinationals seek local management after expanding into China (Gamble, 2000; Melvin and Sylvester, 1997). RECRUITMENT AND SELECTION The market for skilled and graduate engineers in the Chinese market is tight exulting in rapid wage increases and high turnover rates. Poaching of employees is a common thread.
Nepotism and over hiring can be a problem where there is a heavy influence of _Guiana_ and arranging for the transfer of staff from one firm to another maybe difficult due to the influence of the state and the need for staff to gain approval from former work units. The poaching of an employee could lead to liability for economic loss payable to the former employers of the FIEFS new recruit. EMPLOYEE RETENTION The retention of well trained local staff has been a big challenge for FIEFS in China due to the tight labor supply against overwhelming demand.
To address the situation Of retention most foreign owned firms in China have taken advantage of the labor laws in setting Compensation and benefits that are very competitive and also providing the other career building services into labor contracts e. G. Over attachments, thus making themselves more attractive than the competition. OUR HUMAN RESOURCES STRATEGY IN CHINA Our firm is an rare engine assembly and maintenance in Shanghai, China. This firm is a Wholly owned Foreign subsidiary or Foreign Investment Enterprise (FIE).
This strategy of market entry is as a result of a need to keep complete control over the entire Rare Engine Assembly and Maintenance process by applying World class Business and Quality Management tools. The firm has entered into partnership with Key Chinese Rare Engine parts suppliers for certain parts. These partners are recognized world wide for the quality of their products and have been supplying other rare engine firms globally. We have recognized as fundamental to our success in China the need to employ and integrate the highest quality of staff including Home Country
Nationals, Home Country Expatriates and Foreign Expatriates. Home Country Nationals are Chinese nationals based in China and recruited in China, Home Country Expatriates are Chinese Nationals who we have recruited overseas and have worked in our company with the end goal being they would be a spearhead in our move into the Chinese market while Foreign Expatriates are Nationals of other countries using their skills in China to optimism business potentials and ensure quality. Our aim is to deploy an all engaging Human Resource Strategy and our strategy is to develop the firm as a Learning Organization.
Recruitment and Selection in our Chinese operations is going to be conducted on a localized basis with the local HER Managers being responsible for the Process of recruiting staff at the graduate level and middle management level for Home Country Nationals. The selections and recruitment of Expatriates either Home Country or Foreign would be conducted by the Head Office and the same applies for the Recruitment and Selection of senior management and executive Management staff.
Where the senior or executive management staff is Chinese the local HER Managers would have an input into the process s they would have been involved in the process from the Onset. Our recruitment process would differ according to the type of staff we are seeking to recruit We would divide this process into three parts mainly Graduate Engineers and Skilled Technicians Middle Management Senior and Executive Management Expatriate Staff GRADUATE AND SKILLED TECHNICIANS The process for recruitment and selecting graduate engineers and skilled technicians would be carried out with a low cost model in mind.
This is as a result of the expected high number of applications. In ensuring that we recruit the best Graduate Engineers, we would be seeking o develop relationships with Universities thereby targeting these engineers as they are leaving the Colleges and thus molding them from the start to fit with our organization style and culture. We would also use the mass media to reach out for applications mainly newspapers and the internet. We would deploy a web based filter System, so even though we have placed adverts in newspapers we still expect that all applications will be filled out online.
The application forms would all be in Chinese but we expect any prospective applicant to be ready to learn English. Our selection process is going to be based on Testing and Interviews, we old not encourage the use of psychometric tests as we cannot assure of the validity in this environment (Chow, 2004) MIDDLE MANAGEMENT The recruiting of staff at this level would be carried out by placing adverts in newspapers, head hunting and poaching. The shortage of skilled labor in China has made employees highly mobile and thus headhunting and poaching are socially acceptable means of recruiting.
Though poaching is allowed, an employer can be sued for economic damages by the former employer if the employee’s termination was not properly done. In other to ensure our indemnity any prospective employee that has been poached deeds to provide evidence that his past employer has released him without any liabilities. Selection for Graduate Engineers, Skilled Technicians and Middle Management staff would be conducted via interviews. These interviews would be structured interview, job oriented questions with pre determined answers that tuned around the prospective job descriptions.
These interviews will be conducted by a panel which ensures that an all round assessment is performed. SENIOR AND EXECUTIVE MANAGEMENT The recruitment fifths class of persons would be carried out with the assistance of an executive management recruitment agency though we expect to have difficulty in finding such agencies (Change, 2004). We also plan to head hunt and seek the opinion of other businesses within the Chinese markets. The process of identifying, Interviewing and selection would involve the Head Office from start to contract signing.
Interviews for these positions would be conducted at the head office, this is to ensure that key members of staff at the head office have the opportunity to evaluate the potential staff. EXPATRIATE STAFF The recruitment of expatriate staff would be the sole responsibility of the head office while the local HER Managers would be responsible for managing he expatriates when they are in country. The head office must ensure that the clear objectives are set for Expatriate staffs and that these persons have been selected to fit the job and the culture.
The success of this class of staff will ultimately lead to organizational success as they would drive the process of instilling, Corporate culture and values, Quality Management targets and process and they would also facilitate Knowledge Transfer in the work place. It is intrinsic to success that these persons understand the values and fundamentals of local cultures as highlighted above in the section under employment issues. A thorough culture immersion programmer and pre-departure visits may also be ideal.
The local HER Managers must also develop programmers geared at ensuring cultural and in country integration for expatriates both foreign and Home Country (because a national who has not lived in country for a number of years would most certainly need some form of integration back into the society). It would also be expedient for the home office HER Managers when recruiting married expatriate staff to consider the fit of the spouse to the new environment as poor spousal fit has been attributed to some expatriate failures.
All offers made after selection must be written in clearly constructed contracts stating the Job description and responsibilities, remuneration, working conditions, conditions of termination and liabilities for breach of contract. Agreed clauses based on benefits structure include: terms of probation, training, confidentiality, holiday days and paid leave (vim. Her. Com). All labor contracts must be in Chinese and copies kept in both Chinese and English. The local HER managers must also ensure that personnel files have been received from the labor bureau before any prospective employee signs a labor contract.
It has be noticed that this process could delay employment (China Staff, 2003) so it is expedient to start making the request immediately the employment process starts.