How Cultural Determinants May Affect HRM: The Case of Italian Companies in China

By Pauluzzo, Rubens | Research and Practice in Human Resource Management, June 2010 | Go to article overview

How Cultural Determinants May Affect HRM: The Case of Italian Companies in China


Pauluzzo, Rubens, Research and Practice in Human Resource Management


Introduction

Observing an image in a mirror is the common example used by several scholars to represent a business relationship between Western and Chinese counterparts (Hofstede & Bond 1988, Trompenaars & Hampden-Turner 1998). Actually, operating in China could be better represented by the reflection in a pond. Like the image reflected by the water, the edges of the intercultural business relationship may appear not clearly defined. What is considered usual or common in the Western experience may involve distinct and non easily comprehensible meanings in China. This is mainly due to the fact that individuals tend to use their own cultural values to interpret actions and behaviours of other members of different cultures. This often leads to serious miscommunication problems. As a consequence, business relationships between Western and Chinese companies may be affected by different degrees of cultural conflicts and misunderstandings.

The main literature has identified a set of critical determinants that are linked to the economic success of Western companies in China (Hofstede & Bond 1988, Ward, Pearson & Entrekin 2002, Fang 2006, Chinta & Capar 2007). The most part of them is related to cultural issues, business etiquette, language skills, Chinese politics and history, negotiation strategies, communication and logistics. In particular, knowledge and comprehension of Chinese culture and etiquette represent a fundamental key to unlock the opportunities offered by the Chinese market. The significance of family and group ties, the concepts of guanxi, 'face' and harmony, Confucian ethics and philosophy deeply characterise the Chinese socio cultural framework and influence individuals' and group behaviour as well as interpersonal and business relationships. Therefore, companies interested in penetrating the Chinese market should carefully comprise a proper evaluation of the potential outcomes of cultural aspects when planning their strategies. As stated by Adler (2002), one of the most important challenges of the 21st century is to create multinational organisations able to support an economically vibrant and culturally diverse global society.

In an international context, characterised by tendencies of global integration and local differentiation, several scholars have stressed the need to develop HR strategies and practices as fundamental sources of competitive advantage (De Cieri 2003, Schuler & Jackson 2007). In spite of the significant changes of the international markets, many organisations tend to use traditional tools to manage human capital on global scenarios, based on the mere transfer of HRM solutions from the home country to the international markets. This choice often leads the firm to face several problems that may affect its economic results in the foreign market. Therefore, in order to trace a long term path on distant and different markets it is necessary to develop strategies to manage human capital able to encompass a particular attention to cultural issues (Dowling, Schuler & Welch 1994).

Cultural determinants still have a deep influence on the Chinese society, and by means of shaping individuals' behaviour and their ways of thinking and acting, they also affect business and organisational relationships (Su Nie 2008). Therefore, the knowledge of these aspects and their correct management within an organisation is a lever that may lead the company towards successful paths in China. Nonetheless, Western firms tend to give negligible importance to the problems that may arise in a cultural different universe. This short sighted position does not consider that these difficulties may generate barriers able to negatively influence the economic and financial management of the firm.

This study aims at suggesting a study model, in order to analyse the relations between the degree of knowledge of the main Chinese cultural values and HRM in China, by providing empirical evidence of the central role that should characterise cultural sensitivity in leading HR strategies and practices. …

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