Cultural issues in management Essay Example | Topics and Well Written Essays - 1500 words

Cultural issues in management - Essay Example Key issues in International HRM In the contemporary environment of competitive business, expanding business must understand the changing socio-cultural background of the country, where one needs to establish the business interests. Social scientists assert that national cultures are vital elements that determine the negotiator’s assumptions and help evolve business strategy based on behavioral pattern (Cohen, 2004; Rubin & Sander, 1991). China has a culturally distinct economy. The socio-cultural value systems are vastly different and business practices are very sensitive to behavioural pattern and intrinsically linked to their socio-cultural value system. Dowling et al (1999) argue that Chinese socio-political and cultural environment is complex, especially as Chinese nationalism remains key obstacle for foreign firms and poses serious challenge to their IHRM. Many scholars strongly support use of local talent and resources as important part of joint ventures that promote loc al economy as people prefer to deal with local professionals rather than expatriate managers (Schuler, 2001; Poole, 1999). This is a highly pertinent issue for foreign firms as they tend to spend huge amount on training and cross-cultural adjustments. There is lot of conflict if the expatriate manager tries to impose his/her own values on the local people. Chinese culture promotes ‘guanxi’, a shared language and a shared culture, where Chinese employees prefer to interact with people who are well versed in their language and culture (Dunning & Kim, 2007; Chen & Starosta, 1998). Thus, IHRM has huge responsibility vis-a-vis managing its human resources and optimizing performances when their business has to be conducted with Chinese, within or outside China. The need to understand the Chinese...Microsoft’s HR strategies were highly creative which were able to exploit human competencies. It promoted a facilitating organization culture that emphasized cross-cultural u nderstanding, trust-building and mutual respect. Preparing cross cultural teams Microsoft promoted multicultural team. Microsoft’s success in China was mainly due to their understanding of Chinese culture and people which was exploited by the HR leadership. Negotiation Business negotiations are intrinsic part of corporate strategy which is designed to reduce conflicts and promote mutually satisfying partnership contract vis-Ã  -vis business goals, financial outcome, terms and conditions, scope etc. In international business across national borders, negotiations are sensitive issues due to different value system, socio-cultural perspective, currency, legal paradigms and market conditions. Culture is integral part of negotiation. Effective CI practices CI practices are intrinsic part of global business planning which rely on information gathering regarding various aspects of business in countries which are perceived to have huge potential for business expansion (Adidam et al, 2009). China, being a major developing economy with vast potential, is highly attractive for foreign businesses. IHRM practices must be dynamic for effective negotiation and running of businesses in countries like China which offers huge opportunities.