hurman resource managment assignment
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MODULE ASSIGNMENT COVER SHEET
MATRICULATION NUMBER: 40190077___________________________________
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MODULE TITLE: Human Resource Management__________________________
MODULE NUMBER: HRM11771 2015-6 TR1 003___________________________
NAME OF MODULE LEADER: Jennifer O'Neil_____________________________
DATE OF SUBMISSION: 23rd November 2015______________________________
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4019077International Business Management
HUman Resource Management
Edinburgh Napier University
EXECUTIVE SUMMARY
Gamecorps as one of UK fast-growing computer software chain stores, wanted to
expand its business to China, it has open various stores located in European
countries. In order for this organisation to internationalise its operations, one of many
things to consider is the HRM approaches. China and UK possess various
differences in cultural value, by utilising Hofstede’s five dimensions these differences
can be explained and analysed to give better understanding for corporate functioning
purposes. The 5 dimensions are power distance, uncertainty avoidance, Long term
orientation, masculinity, and individualism. The next concern is the company
orientation, optional choices are ethnocentrisms, polycentricism, and geocentricism,
to maintain the corporate home country value and maximising customer services in
host country ethnocentric and polycentric approach is used. In polycentric approach,
the need of local staff is important, hence its recruitment and selection practices
need to be taken into account, recruitments tools such as online and newspaper
advertisement can be sued to attract strong motivated individuals, as for the
selection practices need to be conducted in correct and impartial procedures to give
opportunity to all candidates.
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Index
Executive Summary 2
1. Introduction 4
2. Key cultural differences in China and Europe and its significance in the HRM
approach. 4
2.1 Cultural differences Based on Hofstede’s Dimensions 4
2.2 Significance of cultural differences in HRM approaches 7
3. Organisation Orientation 8
3.1 Ethnocentric Approach 8
3.2 Polycentric Approach 9
3.3 Geocentric Approach 9
3.4 Suggestion on EPG orientation for Gamecorp 10
4. Policies and Practices for recruitment and selection of local staff. 10
4.1 Recruitment and Selection Policies 10
4.2 Recruitment and Selection Practices 11
4.2.1 Recruitment Practices 11
4.2.2 Selection Practices 11
5. Conclusion 12
6. References 13
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1. IntroductionIn this globalization era, business internationalisation has become more
common, this is due to competition between each participants in their own respective
industries, various firms is trying to expand their business not only in their home
country but others as well to gain higher profit and outwits their competitors in the
eye of international customer/consumer. In order to gain high efficient and effective
operation in business expansion, Human Resource Management (HRM) is one of
the key component in achieving this target. Human Resource Management (HRM) in
general is body of management activities however in modern context it is more than
traditional personnel management, it has four objectives to be completed namely
staffing, performance, staff-management and administration, and these four
objectives formulate the basic of HRM activities. In international level, HRM has
comparable function as the common HRM with the only difference is the application
in global context (Briscoe et al., 2009), and subsequently addressing broader issues
including cultural differences. Understanding international HRM, may help in multiple
countries operations stability and global company perseverance.
Gamecorp plc as one of UK-based chain of computer software stores, has
decided to expand its business to China. Currently, Gamecorp has establishes
outlets in various European countries (Paris, Berlin, and Milan), in this report as HR
consultant various consideration will be taken account into for Gamecorp in starting
new business in China. Firstly, discussion on the key cultural differences (referring to
Hofstede’s cultural dimensions) between China and UK and its significance for HRM
approach. Secondly, identification on orientation of organisations utilising the EPG
model, and finally policies and practices recommendation which is suitable for
recruitment of local staff.
2. Key cultural differences in China and Europe and its significance in the HRM approach.
2.1 Cultural differences Based on Hofstede’s DimensionsCulture by definition is what differentiate the members of one society to
another, and perhaps stated as collective programming of mind (Hofstede, 1980 in
Pan and Zhang, 2004). Hofstede introduce five cultural dimension in order to simplify
the idea of cultural differences, namely: Individualism vs collectivism, masculinity vs
femininity, hierarchy or power distance, Uncertainty avoidance, and time orientation
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(long vs short) (Hofstede, 1980). In regards of these dimensions analyses on UK and
China cultural differences will be conducted, the data of these dimensions
representing each countries is shown in figure 1.
Power Distance Individualism Masculinity Uncertainty Avoidance
Long term orientation
35
89
66
35
5150
76
60
75
61
35
67 66 65
83
68 71
43
86
63
80
20
66
30
87
Cultural dimensions comparisons
UK Italy German France China
Figure 1. Cultural dimension comparison between China and European countries (Hofstede Center, 2012)
Power Distance
This dimension is associated with inequity acceptances level, high power
distance nations acknowledge status and power distinction as essential, preferring
domineering leadership, and relies on condescending decision making and
instruction, whereas low power distance leadership pursues advisory and
participative decision making (Sue-Chan and Ong, 2002). Shown in figure 1, China
has higher power distance compared to European countries, high power distance
may affect the lack of employee participation, employee prefers decision being made
by managers and do not like to take extra responsibilities, i.e.: Chinese employees
adopt high power distance value and organisation are highly centralised, the value
ruling hierarchical power relations is the core of Chinese organisational culture
(Khatri, 2009). It is expected that Chinese employee will not conduct two way
discussion with their managers and questions manager decision in comparison with
Europeans counterparts.
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Individualism and Collectivism
The second dimension involves Individuals extent to pursue their own
activities and goals rather than involvement to the success of larger groups. In
individualism society is seen as medium to provide requirements for individual,
personal responsibility, where families ties are not prioritized. Usually this concept is
infused since young age, taught to make own decisions, interpret own value, solve
own complications, and create own ideas. However collectivist, see themselves as
members of group and have strong responsibility to it (Ferraro, 2002). UK and other
Europena country has considerably higher number of Individualism score compared
to China, suggesting it is a collectivist cultured country. In collectivism organisational
environment, significant decision is made in group, jobs are intended for optimizing
social conditions, awards are nominated on the idea of equality, and accountability of
company failures and success lies within group (Marcus et al., 2013) . These
characteristics are expected from Chinese employee behaviour, hence affecting
differences in HRM strategies than UK individualistic employees.
Masculinity and Femininity
In Masculinity dimension, demand men are expected to show assertiveness,
ambition, aims for material achievement and competitive, while women is meant to
serve and care. In femininity however, men are not demanded to be ambitious or
dominance and may seek another life aspect other than materialism. Masculine
culture attempt to present diversity between women and men behaviour and
approach life fulfilment (Arrindell et al., 2003). UK, China and others European has
similar score in masculinity, proposing all countries adopt masculinity culture, striving
for success, driven by wealth/material as goals, and involved in competition.
Uncertainty Avoidance
This dimension reflects human fortitude against uncertain circumstances. It
is when individual despise uncertainty, ambiguity and unpredictability. High
uncertainty avoidance culture is attempting to avoid such situation and find order,
structured, interpretable situations, comparably low uncertainty avoidance culture are
flexible, comfortable with ambiguity, new ideas, variance in circumstances and
changes in regulations (Venaik and Brewer, 2010). China and UK both has low
uncertainty avoidance (30-35) compared to European countries (65-86), showing
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high level of tolerance in unpredictable element in life, at professional cases,
uncertainty avoidance level is described as employee feeling of uneasiness about
uncertainty or ambiguity, and degree of effort to avoid such conditions by asking for
rules and guidance. (Zhang and Zhou, 2014).
Long Term Orientation
This orientation referring to people choice of focus and efforts on time
orientation, this dimension retain Confucianism value particularly in Asia country.
Long term orientation society nurtures virtues and oriented towards future rewards,
specifically perseverance and thrift, while short term is static, respect tradition,
saving ”face” and performing social responsibility, .(Maleki and de Jong, 2013).
China shown as highest long term orientation countries among others while UK is
the lowest, signifying the idea to operate business in China requires long term
investment, and trust is build based on history or reputation in fulfilling obligation,
whereas for UK trust are put in system therefore legal bind of contract or signed
written agreement (Wang et al., 2008).
2.2 Significance of cultural differences in HRM approaches Comparison of cultural differences has revealed commonly China based on
Hofstede national culture dimension is high in power distance, collectivist, and long
term oriented, while UK is low in power distance, individualist, and short-term
oriented, however both country display resemblance in moderate level of masculinity
and low uncertainty avoidance. These three significant culture dimension distinction
revealed that Gamecorp HRM strategies in UK may not be applicable in China
subsidiary.
Chinese management and business systems are highly centralised and
hierarchical, decision making is not independent, managers are unwilling to take
individual accountability and follows guidance of supervisors, therefore they are tend
to avoid any conflict/debate which may be taken as insubordination by their
superiors. Secondly, long term orientation culture in China may suggest employee
expect long term job security offered by firms, it is one of consideration for HR
managers during recruitment (Zhang and Edwards, 2003)
Finally, China is culturally collectivist, it is often seen that organisations
works in group, this influence motivation strategies, such as performance feedback,
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which is more toward the achievement as a group rather than individual. The
Performance appraisal for collective society is viewed as personal development than
for administrative purposes, both on the job and off the job behaviour is equally
important, and personality review is commonly included in collectivist performance
assessment (Cheng and Cascio, 2009).
3. Organisations OrientationIn globalisation of companies, DR Howard V. Perlmutter introduced
distinctive international firm’s managerial orientations, named the EPG model,
stating that senior management at international organisation should take account of
three orientations: Ethnocentric, Polycentric, and Geocentric, in order to construct
and increase company’s multinational competences (ProvenModels, 2015).
3.1 Ethnocentric Approach
This orientation concentrates on home country organisational culture,
ethnocentrism believe own ways of performing things to achieve one’s objective is
the best regardless of any culture involve and will not adjust to any local practices
(Ahlstrom and Bruton, 2010). In HR context, staffing in organisation which adopt
ethnocentric, the company key managerial positions will be filled by those from home
country, usually if the company relocate, numbers of managers from company
headquarters will be reposition to the new subsidiary (Hill, 2005).
Application of ethnocentrism orientation aids the organisation issues in lack
of qualified staff for new outlets, it is also an efficient method of keeping company
culture integration and facilitate home country in controlling foreign branches.
Another positive outcome is reduced cost for training new employee and by
transferring managers from headquarters, it helps moving the company core
competencies as well, since managers already possess main company
organisational and operational expertise. Although ethnocentrism provide positive
effect in expanding company, some issue like prejudice may arise in perspective of
cultural differences on marketing and management decision making process.
Secondly, in terms of cost, managers requires high compensation for moving from
one country to another, not to mention time for adaptation which ultimately may not
be efficient for the company.
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3.2 Polycentric Approach
This orientation take account of other countries particular nation
specifications, using benefits from any local subsidiary activities. Opposing
ethnocentric, the main characteristic of this orientation is decentralisation is exhibited
in establishing company oversea subsidiaries. The objective of polycentricism is to
ensure the success of local markets, focusing the strategy in developing exact
modified programs for each international outlets (Wach and Wojciechowski, 2014). In
HRM angle, company will employ local managers in running the host country
operation.
Polycentric is less expensive to execute since there is no necessity for
cross-cultural training programs, and it is also less likely that local managers make
mistake in decision making due to cultural misunderstanding such as language
barriers or local decision making procedures (Dolinska et al. 2005). Another
advantages regarding polycentric approach is flexibility in manager’s action
regarding local business operations since it is not strictly controlled by the home
company, although it may lead to confusion should the coordination between host
and home subsidiaries is poor ,causing conflict in company policies (Beamish and
Calof 1994).
3.3 Geocentric Approach
Geocentricism is when organisations treats all international markets as one
global market (sociologically and economically uniform), assuming that some
differences can be purposely overlooked. It is the combination of both polycentric
and ethnocentric framework, trying to generate global strategies that is responsive to
local needs and wants, it makes no special distinction in home or host country, the
main strategies is making the best of very opportunities present of every market,
similar to theory of comparative advantage (Drachal, 2014).
This orientation utilise human resources management effectively and
increase the possibility of international management team development, also
allowing the firm to be more competitive in global market as all are drawn closer
toward each other, seen as the segments of the global market and handled with
identical technique. Geocentricism also enhance the local market responsiveness
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better over other approach, however it is more costly to be implemented due to
relocation and training of managers and there are other factors that may interrupt the
application such as labour standards, customer needs and wants, and countries
rules and regulations, which is diverges significantly in various countries, thus this
orientation is a big challenge for a company.
3.4 Suggestion on EPG orientation for Gamecorp
Based on observation of all orientation advantages and disadvantages, the
best framework to be executed in China will be mixture of ethnocentric and
geocentric approach. In early stage of business expansion in new region, it is widely
accepted to apply ethnocentrism in which all organisational arrangement follow those
already present in the home country (Dolinska et al. 2005). Gamecorps wishes to
establish its robust corporate character in China outlets, it is more effective to send
the key mangers to each local stores will aid the organisation to achieve this as they
have more knowledge on the organisation. In order to deliver excellent customer
service and effective sales performance, employing locals will assist in fulfilling this
(adopting Polycentrism), as they understand local cultures (erasing culture or
language limitations) and leading to comprehending customer preferences and
requirements. The mixture of both home and host country staffing improves the
organisations in maintaining its value while understanding the host country condition.
The home country managers can be assign to administer training program for
employees on the organisations code of practice and operation standards, to help
preserving stability between subsidiary in China and UK headquarters.
4. Policies and Practices for recruitment and selection of local staff.4.1 Recruitment and selection Policies
The best policies applied for Game corps based on Chinese culture as well
as Gamecorp’s aims which are producing high standard of customer services
managed by staffs with suitable knowledge and good sales ability while conserving
the corporate identity, is therefore the policies made for local staffs. This policies
main focus is on equity and transparency, concerning recruitment and selection by
giving same opportunity to both internal and external human resources without being
partial on candidate’s personal relation and only judging based on their
achievements. Recruitment sources should be the wide pool of talent, and
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diversification should be created, in order to improve organisation performance.
Implementing this will attract and recruit potential employee with various
backgrounds, skill, and ability, who possess high commitment to organisation. Finally
to ensure confidentiality of all data on personal information, the data storage must be
secured.
4.2 Recruitment and Selection Practices
4.2.1 Recruitment Practices
Internal and external means can be executed for the selection practices,
occasionally internal recruitment refer to promotions within concept, attempting to
develop organisation current employees. While options for external method includes
newspaper advertisement, universities, and online employments (Zhou, 2006).
Internal recruitment candidates should be identified through the company
HRM system, and then offered the job. It will encourage passionate and good
employees, as they are from within the company, information on their performance is
known and they are more accustomed to company operation. Executing this strategy
may improve organisation performance, while maintaining corporate identity
(Decenzo and Robin, 2001). In this case, this method might be used in finding
suitable managers to be sent to China subsidiaries.
For external recruitment, advertisement in newspaper and universities career
fair are generally used in China for recruiting entry level, sometimes internship
program for university graduate to obtain work experience. However for higher
managerial position require specialized publications to be utilised (Zhou, 2006). One
of recent option for employment is through online method, exploiting company
recruitment website where the job specifications and requirements along with
provided benefits (Galanaki, 2002). On the website, organisation value and
background should be included for the benefits of individuals applying for the
positions offered, it is to ensure that the corporate value suited for them hence
eliminating those who does not share the same value as the company. Alternatively
using recruitment agent or commercial job posting service may be aiding in providing
classified job advertisement in which the interested candidates can give response to
it.
4.2.2 Selection Practices
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The selection for Chinese applicants must be based on some attributes like
motivation, company knowledge, initiative, leadership and loyalty (Huo and Glinow,
1995). This can be attained by the suggested selection practices includes evaluating
CV, interview (phone or face to face), competency test, and valuation measure. The
first step in selection practices is the screening of CV which comprises scanning
software, next is the selected individuals are invited for interview, and in this stages
is to verifying the CV credibility and examining required skills, experience, and
personal qualities. In order for equality among interviewees, the same set of question
and structure should be used for all candidates. The third stage is aptitude test and
followed by assessment measure. For the fourth stage, assessment includes
interactive role play, simulation trainings and leaderless group discussion (Dickie and
Dickie, 2005). Finally the candidates is re-invited for second interview before they
are hired to be employed in the positions offered.
5. ConclusionOne of many International HRM challenges is cultural differences, it is
complex yet significant factor in globalisation of organisation. Hence by using five
Hofstede’s national dimensions, UK and China has shown distinctions in cultural
value, which influence HRM strategies of Gamecorps subsidiary in China. As Game
corps expand its business in China Ethnocentric and Polycentric approach should be
applied, for the benefit of maintaining original company identity while implementing
superb customer services operates by locals who understand China customer
requirements. However these orientation may change dependant on the future
operations. The local staff recruitment and selection practices should be impartial
and with correct procedures to obtain the highest quality employee who not only
qualified for the position but shares Company value as well, it can be realised by
using available tools and sources for hiring. In conclusion business internalisation is
complex and requires various identification and planning strategies, to prevent any
management and business issues.
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