Harvard Case - Clash of Mobility: Managing Expatriates in a Globalizing Chinese Company
"Clash of Mobility: Managing Expatriates in a Globalizing Chinese Company" Harvard business case study is written by Yiwen Zhang, Penny Lau. It deals with the challenges in the field of Human Resource Management. The case study is 15 page(s) long and it was first published on : Jun 4, 2019
At Fern Fort University, we recommend that Huajing implement a comprehensive strategy to manage its expatriate workforce, focusing on cultural sensitivity, talent development, and fostering a collaborative environment. This strategy should address the specific challenges faced by both Chinese and foreign employees, aiming to create a cohesive and productive global team.
2. Background
This case study focuses on Huajing, a Chinese manufacturing company experiencing rapid globalization. Huajing faces challenges in managing its expatriate workforce, particularly in its newly acquired German subsidiary, where cultural differences, communication barriers, and differing management styles create friction. The case highlights the struggles of German employees adapting to Huajing's hierarchical structure and the difficulties of Chinese expatriates integrating into the German work environment.
The main protagonists are:
- Mr. Chen: The CEO of Huajing, responsible for leading the company's globalization strategy and managing the integration of the German subsidiary.
- Mr. Schmidt: The former CEO of the German subsidiary, who is now a senior manager under Huajing's leadership. He represents the concerns and perspectives of the German employees.
- Ms. Li: A Chinese expatriate manager in the German subsidiary, who faces challenges in navigating cultural differences and asserting her leadership.
3. Analysis of the Case Study
This case study can be analyzed through the lens of Organizational Behavior and Human Resource Management.
Organizational Behavior:
- Cultural Differences: The clash between Chinese and German cultures is evident in communication styles, decision-making processes, and leadership expectations. This creates a significant barrier to effective collaboration and integration.
- Organizational Culture: Huajing's hierarchical and centralized culture clashes with the more egalitarian and decentralized culture of the German subsidiary. This discrepancy leads to misunderstandings and conflicts.
- Leadership Styles: Chinese managers tend to adopt a more directive and authoritative style, while German managers prefer a more participative and collaborative approach. This difference in leadership styles creates tension and hinders effective communication.
Human Resource Management:
- Hiring and Recruitment: Huajing's lack of a clear strategy for hiring and recruiting expatriates leads to mismatches in skills, cultural fit, and expectations.
- Talent Management: The company lacks a structured program for developing and retaining expatriate talent. This results in high turnover and a lack of investment in building a global workforce.
- Compensation and Benefits: The differences in compensation and benefits packages between Chinese and German employees can lead to resentment and a sense of unfairness.
- Employee Training: Huajing needs to invest in cross-cultural training for both Chinese and German employees to improve communication, understanding, and collaboration.
- Employee Performance Management: The company needs to develop a performance management system that acknowledges cultural differences and promotes a fair and transparent evaluation process.
4. Recommendations
To address the challenges faced by Huajing, we recommend the following:
1. Cultural Sensitivity and Integration:
- Cross-Cultural Training: Implement mandatory cross-cultural training for all employees, including Chinese expatriates and German employees. This training should focus on understanding cultural differences, communication styles, and conflict resolution techniques.
- Cultural Ambassadors: Appoint cultural ambassadors from both Chinese and German teams to facilitate communication and understanding between the two cultures.
- Mentorship Programs: Establish mentorship programs pairing Chinese expatriates with German employees and vice versa. This will provide a platform for knowledge sharing and cultural exchange.
2. Talent Development and Retention:
- Global Leadership Development Program: Create a structured leadership development program for expatriate managers, focusing on intercultural communication, global business strategy, and leadership skills.
- Career Advancement Opportunities: Offer clear career paths for both Chinese and German employees, ensuring equal opportunities for advancement based on merit and performance.
- Compensation and Benefits Review: Conduct a comprehensive review of compensation and benefits packages to ensure fairness and equity across different nationalities and locations.
3. Fostering a Collaborative Environment:
- Open Communication Channels: Encourage open and transparent communication between Chinese and German employees through regular meetings, informal gatherings, and online platforms.
- Team Building Activities: Organize team building activities that promote cross-cultural interaction and collaboration.
- Shared Values and Vision: Develop a shared set of values and a clear vision for the company's global operations, emphasizing collaboration, respect, and inclusivity.
5. Basis of Recommendations
These recommendations are based on the following considerations:
- Core Competencies and Consistency with Mission: The recommendations align with Huajing's mission to become a global leader in manufacturing by fostering a diverse and inclusive workforce.
- External Customers and Internal Clients: The recommendations aim to create a more harmonious and productive work environment, which will ultimately benefit both external customers and internal clients.
- Competitors: By effectively managing its expatriate workforce, Huajing can gain a competitive advantage in attracting and retaining top talent in the global market.
- Attractiveness ' Quantitative Measures: While quantifying the impact of these recommendations is challenging, the expected outcomes include improved employee morale, reduced turnover, increased productivity, and enhanced brand reputation.
6. Conclusion
Huajing's success in globalizing its operations depends on its ability to effectively manage its expatriate workforce. By implementing a comprehensive strategy that addresses cultural differences, fosters talent development, and promotes a collaborative environment, Huajing can overcome the challenges of managing a global team and achieve its strategic goals.
7. Discussion
Other alternatives not selected include:
- Separating the German subsidiary: This option would involve maintaining a distinct organizational structure and culture for the German subsidiary, which could lead to further cultural isolation and hinder integration.
- Focusing solely on Chinese management: This option would disregard the expertise and experience of German employees, potentially leading to resentment and a decline in employee morale.
The key assumptions of our recommendations include:
- Commitment from leadership: Huajing's leadership must be fully committed to implementing these recommendations and fostering a culture of inclusivity and collaboration.
- Willingness to adapt: Both Chinese and German employees must be willing to adapt to new ways of working and embrace cultural differences.
- Open communication: Open and honest communication is crucial for addressing challenges and building trust between employees from different cultures.
8. Next Steps
- Develop a detailed implementation plan: This plan should outline specific actions, timelines, and responsible parties for each recommendation.
- Secure buy-in from leadership: Ensure that senior management is fully committed to the implementation of the strategy.
- Monitor progress and adjust as needed: Regularly monitor the effectiveness of the implemented strategies and make adjustments as needed based on feedback and performance data.
By taking these next steps, Huajing can successfully navigate the challenges of managing expatriates and create a thriving global workforce.
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Case Description
Yalia, a Chinese tech company that is experiencing rapid expansion overseas, has been sending more expatriates on assignment in recent years, but its approach to global mobility has not caught up. Managers are not strategic about the expatriation process. Existing mobility policy guidelines are unclear and has not been adjusted to address the company's expansion needs. Xiao Jing, the new human resources director at Yalia, is becoming frustrated with the outdated approach as she deals with a recent complaint from a Chinese mid-level manager, Fan Kewen. Fan, the head of Dubai's office, thinks it is unfair that his housing budget is lower than that of his US colleague from a newly acquired cloud solutions company, and he threatens to shorten his assignment. As she investigates further, she uncovered the difficulties of Fan working in a foreign culture, as well as differences in cultural and policy practices at Yalia and the acquired company. Jing suggests to Liu Hong, head of global strategy and managing director about a policy overhaul, but Hong dismissed, and instead asks her to use monetary incentives to keep assignees happy. What should she do? The case demonstrates how global mobility policies need to consider operational needs, business strategy and talent strategies. It breaks down the components of an expatriate package, and shows how culture can play into its design. It also shows the impact of having a well-structured, strategic approach to managing mobility programs.
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