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The trend in offshoring and the overseas relocation of the manufacturing and the operations aspect of a business has been increasingly popular over the recent years especially among many developed countries in the world. This was mainly due to the promise that offshoring brings to these companies in terms of saving operational costs and enjoying certain government incentives which these companies may benefit from should they intend to invest and set-up their local operations in particular countries which offer these business opportunities (Denault, J. 2006).
China is one of the most important key relocation countries in the entire world recognized by developed countries as ideal for offshoring opportunities. Currently having the third largest and most developed economy in the world, China excels as the best country for relocation as it offers the cheapest and most ideal site for industrial activities and industrial companies to set up their operations. Dowd, G.C. (2006) states that one of the most important reasons why China is very attractive for offshoring and business relocation is due to its cheap labor cost and highly-skillful labor force.
Not minding the barriers to communication and language, many companies driven to gain a huge percentage reduction in operational costs, flock to China in order to set up their business operations in that specific country amidst many challenges and difficulties these companies are bound to face. In fact, the process of setting up a business operation in China was never an easy task contrary to many people's beliefs. Aside from the language being an important barrier, cultural factors also hugely affect the way businesses from other companies are being set-up.
According to Miller, J. (2005), not only the culture and the language serve as constant barriers to foreign businesses in successfully setting up their business operations in China but also its people or its labor force. In this area, the Human Resource Management of a foreign business intending to set up a relocation business in China needs to perform a lot of work in order to ensure that the right people are employed by the company. Moreover, the Human Resource Management function of the company needs to consider how other foreign companies successfully overcome the most important cultural and people-related challenges in building a business operation in China.
In this paper, the author will be identifying and discussing certain critical aspects in the process of offshoring in China in the context of the relocation experiences of a known toy company in the UK named MEM Toy Company. Specifically, this paper will discuss the possible concerns and issues that the MEM Toy Company's Human Resource Management function may be able to experience as a consequence of the offshoring process and how the company should deal with these problems.
The Cultural Differences between UK and China and its Impact on the Workplace
According to Doke, D. (2004), there are innumerable cultural differences that exist between Western countries and Eastern countries like UK and China. In fact, many companies from the West which send their employees to work in the Eastern countries experience a number of failed assignments with their own employees due to the inability of these employees to blend in and adopt the culture of the East. In the same way, many employees from Eastern countries also find it challenging to adopt and blend in the culture of the West especially with regard to work-related matters.
Bryant, B. & Jonsen, K. (2008) states that the leadership and management in countries in the East like China have proven to be very interesting and challenging because of the diverse cultural composition of the business environments within these countries. Culture, most oftentimes, is what serves to be the biggest hindrance and barrier for many Western companies to set up their operations in Eastern countries like China as well as recruit local employees who will comprise the labor force of these companies.
One of the many cultural differences that exist between UK and China is the language. Apparently, there are some UK employees in China who expect that the Chinese employees will immediately adopt the British culture when it comes to business as well as the British English language. Despite the prior knowledge of the Western companies with regard to the communication problems that may certainly exist between the two, the UK employees still set high expectations upon the Chinese employees that the latter will understand them when they speak (Doke, D. 2004).
Another main cultural difference between the UK and China is their work ethics. Doke, D. (2004) states that the British are very individualistic types of people driven by personal ambition and focus on work while the Chinese are also driven by work and ambition but mainly for their families' welfare. Also, while the Chinese may be clear and direct when it comes to work-related matters, the British are more indirect and understated. The British are also known to take lesser risks compared to Chinese and are open to expressing their distrust when it comes to matters involving new situations that are unfamiliar to them. Furthermore, when it comes to making business decisions, the British are extremely cautious, taking and considering all the sides and angles in the decision making process while the Chinese are more on the riskier side of rapid decision making.
When it comes to meetings, the British' concept of brainstorming is not an interaction and exchange of ideas by a group full of individuals. Instead, in a meeting, people are expected to be quiet when they do not have anything important to say and simply allow the key people to speak their minds. In fact, due to this lack of valuable interaction within meetings, many Chinese employees prefer to not attend meetings anymore as they think it was unnecessary (Doke, D. 2004).
Given these various cultural differences that exist between the British employees and the Chinese employees, all these may serve as important barriers to their unity and effectiveness within the workplace. The communication problems for instance may result to the lack of proper exchange of information and coordination within the entire organization. Also, the differences in the work etiquettes and work ethics between the British and the Chinese may also have the tendency to make certain people feel useless, isolated and even "culture shocked" within the organization (Doke, D. 2004).
Payment Approaches for UK Managers
With regard to the sensitive topic on payment and employee benefits, the UK managers in the context of the MEM Toy Company must consider meeting the best salary payment and benefits to their British managers to be deployed in China. According to ChinaUnique (2007), since the British expatriates from UK are to be deployed to China for a relatively long period of time occupying key positions and crucial roles in the organization, they only deserve to get the right amount of salary, benefits and career development opportunities in order for them to be inspired and driven to fulfill their functions.
Also, ChinaUnique (2007) argues that employing people from the UK and having them deployed to China also entails a lot of persuasive and attractive benefits and salary payments in order for them to grab this offer. This is because these people would be sacrificing a lot for this kind of work including being away from their family and friends for a relatively long period of time, missing any career advancement opportunities they may have under the same company in the UK, putting their own job position at risk by moving from the same company but in a different cultural environment and management set-up and finally, losing their accumulated benefits, achievements and years of service in the same company.
If I were part of the top management of the MEM Toy Company therefore, I would greatly consider a relatively higher and full-benefit salary arrangement for these UK managers considering the kind of labor they will be offering the company, including the high expectations that the company has for them and the amount of sacrifice they would be spending in terms of working in a foreign land away from their family, friends and their so-called "comfort zone". Also, I would recommend that the salary and benefits package of the UK managers be dependent on the job responsibilities and expectations of the company with regard to their role and function as well as the duration or the length of stay of these expatriates in China.
This is in order to satisfy the needs of these individuals and convince them as well that moving to China is an excellent job opportunity and an important career development milestone for them. As a human resource management person, I need to be able to provide these employees an attractive compensation package in order to persuade them that all their efforts and sacrifices will be paid for by the company. This is also another means of showing these employees that the company cares for them and recognizes their talents, skills and potentials as employees which is in fact the main reason why the company intends to send them to work in China.
Possible Issues in Setting up Teams within a Call Center
Establishing a closed control call center in China from the UK Head Office is a rather challenging task for the MEM Toy Company. This is mainly due to the fact that the company has no previous experience in setting up this kind of operations in a foreign land, especially in China, wherein people speak a different language and follows an extremely different culture that the British practice. Also, not only do the language and the culture serve as important barriers for the Toy Company to successfully build a call center operation in China but also the differences in the work etiquettes and work practices of these two different kinds of people.
As a human resource management person, one of the main problems which may possibly arise out of setting up teams within a call center is the issue on disunity. For instance, should the UK managers decide to set up a call center filled with two kinds of teams, the Chinese and the British, division and competition will definitely arise from it. There will be a so-called "clash of the cultures" which may result to disunity within the organization which from a human resource management perspective is quite unhealthy for the entire company given that the company is within the borders of China.
Another possible issue that may arise from setting up teams within the call center is the main problem on discrimination. It would be very easy and convenient for the UK managers to commit acts of discrimination against their Chinese employees as they intend to run the company under the British culture. Discrimination may arise in terms of the salary and benefits package that are offered to the Chinese employees as compared to the British employees. Also, there will possibly be discrimination in the way the management treats their employees. Since the management is controlled by the British people, it is very possible for them to treat the two teams differently from each other instead of treating them equally with respect.
In addressing these two main problems on disunity and discrimination therefore, several methods of preventing these issues from occurring may be implemented by the Human Resources Management. One is to ensure that the employees are well shuffled into various groups to ensure that the British employees are mixed with the Chinese employees. This is also for the benefit of both cultures to be oriented with one another's beliefs, principles and languages. Both cultures need to constantly interact and be exposed to one another in order to slowly remove the barrier that exists between the two as well as allow them to become aware and understand the kind of culture each has. I personally believe that without exposing these people to one another's culture, understanding and unity will be quite impossible to achieve.
Another means of preventing the issue on disunity and discrimination from occurring is through inspiring the British management or the UK managers to come up with a set of company rules and policy against employee discrimination. It is the management who are expected to be on top of this effort as without their cooperation and strict implementation of these policies and rules against discrimination, discriminatory acts will inevitably be committed by the people within the organization.
Merits of Sending an Expatriate from the UK to Manage the Call Center against Local Management Recruitment
The main benefit that the MEM Toy Company would be able to gain by sending an expatriate from the UK to work in China as opposed to recruiting new sets of managers from the locals is the fact that the company intends to bring and maintain the British culture within the company. It would be impossible for the company therefore to transfer or move their culture to the call center in China without allowing their own breed of British managers to take control of the management and operations of the entire company.
It would also be advantageous for the company to hire the services of the existing UK managers that they have in the head office as they know who these people are. Trust has already been built as a result of the many years of service that these UK managers have provided the company and therefore, it is only logical for the MEM Toy Company to entrust this huge responsibility of managing their first call center business in China to the people they trust and believe have the potential to achieve the vision and mission of the company.
Also, more than the transfer of culture and the trust and credibility that these people have built for years of service in the MEM Toy Company, it is also for the benefit of the company to skip the recruitment process in hiring for the key and most crucial roles and function in the organization. Since these UK managers are already well-adept with the kind of culture and working environment that the head office has, it would not be as tough for them to function based on their assigned roles and responsibilities as compared to recruiting a manager from the Chinese locals and going through a long and time-consuming training process of equipping this person with the necessary knowledge and understanding on the nature of the business and the organization.
Given all these advantages including the benefit of "understanding and speaking the same language and practicing the same kind of culture" it would therefore be more practical and highly advantageous for the MEM Toy Company to recruit UK managers against Chinese locals for the managerial position in the call center company that the company intends to establish in China.