With the present paper we tried to create a quite comprehensive picture of China, it’s economy, education, law and culture and, based thereof, what challenge a German company that considers expatriating staff to China can possibly encounter.
Though entering the Chinese market with its great potential for future growth is understandably attractive for globally acting firms, setting up shop in the People’s Republic needs to be considered carefully and planned thoroughly.
Besides many other difficulties, the question of how best to make use of German and local staff is vitally important. The success of operating in China will largely rise and fall with the ability of the German expatriates who are responsible for setting up operations in China. Therefore, choosing the right staff for expatriation, training, supervising and caring for it is of utmost importance.
Because of the vast cultural differences, China is probably one of the most demanding expatriation destinations there is. As we showed in our section about culture, China differs from Germany considerably in all but one of Hofstede’s dimension, the most significant difference being the long-term orientation and collectivism. These cultural differences are of course reflected in the way the Chinese work, manage and negotiate. In order to be successful, the German expatriate not only needs to know about these differences, he or she has to adapt to them. As Posth states in his remarks and experiences in China, most foreign enterprises in China fail not because of too high costs or lack of competitiveness, but because cultural interaction problems and missing understanding of each other (Posth, 2006).
Based on the expatriation experiences of Bosch and Volkswagen, the paper gives general recommendations for firms which want to send expatriates to China.
Table of Contents
1. China – Geography, Culture, Political System and Infrastructure
1.1. Geography
1.2. Religion, Culture and Society
1.3. The political system of the People’s Republic of China
1.3.1. Form of government
1.3.2. Institutions
1.4. Foreign relations of the People’s Republic of China
1.5. Infrastructure in China
2. Economy
2.1. The Economic System of the People’s Republic of China
2.1.1. Reforms & current state
2.1.2. Challenges
2.2. Economic Sectors
2.2.1. Main Industries
2.3. Imports and exports
2.4. Foreign Direct Investment
2.4.1. Background of FDI in China
2.4.2. Trends and restrictions of FDI today
2.5. Structure and Proprietorship of Chinese Enterprises
2.6. The Chinese Procurement and Sales Market
3. The educational system and labor market
3.1. The educational system of China
3.1.1. The development of the Chinese education system
3.1.2. Schools in China – Public or Private
3.1.3. Facts and Figures
3.2. Universities in China
3.2.1. Number of universities and students
3.2.2. Degrees
3.2.3. Study abroad
3.3. Labor market
3.3.1. Trends in China’s labor market
3.3.2. Migratory labor
3.3.3. Labor market: State owned enterprises – Private sector
3.3.4. Labor market: Domestic enterprises – Foreign-invested enterprises
3.3.5. Foreign employees in China
3.3.6. The situation for academics in the Chinese labor market
3.3.7. Situation of local university graduates
3.3.8. Recruitment and retention
4. Organization of employers, trade unions and labor law in China
4.1. The organization of employers in China
4.2. Trade unions
4.2.1. The right to strike
4.2.2. Walmart in China
4.3. Labor Law
4.3.1. Overview of Chinese labor law
4.3.2. Recent development in China´s labor law
4.3.3. Workplace democracy at the example of a major foreign MNC
5. Global Mindset and Culture
5.1. The model of Kluckhohn and Strodtbeck
5.1.1 Relation to the environment
5.1.2 Relationships among people
5.1.3 Mode of Human Activity
5.1.4 Belief about Basic Human Nature
5.1.5 Orientation to Time
5.1.6 Use of Space
5.2. The 5 Dimensions of Professor Hofstede
5.2.1. Power Distance
5.2.2. Uncertainty Avoidance, Collectivism and Masculinity
5.2.3. The model in relation to China
5.3. Halls research
5.3.1. Context
5.3.2. Time
5.3.3. Space
5.3.4. Limitations of cultural models
5.4. Mianzi/ Face
5.4.1. Guidelines for face saving behavior in China
5.4.2. Implications of mianzi in the business world
5.5. The role of guanxi in Chinese business culture
5.5.1. What is guanxi?
5.5.2. Its role in business
6. Expatriation Experiences of German Companies & Best Practices
6.1. Negotiation Tactics of Chinese Managers
6.2. Best practices of expatriation in China from Robert Bosch GmbH
6.2.1. Preparation
6.2.2. Reintegration/ repatriation
6.3. What to do for expatriates in China
6.4. Expatriation Experience at the example of Volkswagen
7. Conclusion
8. Bibliography
Research Objectives & Key Themes
This paper examines the complex environment for foreign companies and expatriates in China, specifically focusing on the intersection of its evolving economic, legal, and educational structures with deep-rooted cultural dimensions that influence business practices.
- Analysis of China's economic system, market structures, and infrastructure development.
- Investigation of the educational system and the dynamics of the local labor market.
- Evaluation of labor laws, trade unions, and workplace democracy standards.
- Application of cultural models (Hofstede, Kluckhohn/Strodtbeck, Hall) to Chinese business culture (Guanxi, Mianzi).
- Case studies of best practices from German corporations (Bosch, Volkswagen) for successful expatriation management.
Excerpt from the Book
6.4. Expatriation Experience at the example of Volkswagen
In order to get a reliable impression of how the challenges of expatriating Western employees to China exist and are met in reality, we tried to find accounts of a specific project that a German corporation was or is engaged in. Though the documentation of precise and practical experiences of German firms in China seems to be quite rare, we were lucky enough to discover a lively and extensive recapitulation of the experiences of Volkswagen AG in China (Posth, 2006).
In particular, former Volkswagen and Audi board of executives’ member Martin Posth describes the challenges that he faced as leading executive officer when Volkswagen set up a joint venture with the Chinese automobile industry in the mid 1980s, thereby painting an accurate picture of the challenge of expatriation.
Starting in the late 1970s, the Chinese government – particularly under the tenure of Deng Xiaoping – implemented an “open door policy” of economic opening and attracting foreign investment and know-how, aiming to industrialize and modernize the backward Chinese economy rapidly. The automotive sector had been identified as a key economic branch to facilitate modern industrialization. Due to decades of isolation and command and control economy, China desperately needed foreign know – how, especially in the fields of management and modern mass production.
Summary of Chapters
1. China – Geography, Culture, Political System and Infrastructure: Provides an overview of the geographic, political, and social context of the People’s Republic of China, including its administrative structure and religious landscape.
2. Economy: Details the transition from a centrally planned economy to a socialist market economy, covering GDP growth, industrial sectors, and the role of Foreign Direct Investment.
3. The educational system and labor market: Explores the structure of the Chinese education system and the challenges of the labor market, including migratory labor and the recruitment of university graduates.
4. Organization of employers, trade unions and labor law in China: Discusses the regulatory framework of labor relations, the role of state-sanctioned unions, and the evolving nature of labor laws like the LCL.
5. Global Mindset and Culture: Applies anthropologic and management theories to analyze Chinese culture, focusing on dimensions such as Power Distance, Collectivism, Mianzi (Face), and Guanxi (Connections).
6. Expatriation Experiences of German Companies & Best Practices: Offers practical insights into managing expatriates through case studies of Bosch and Volkswagen, highlighting negotiation tactics and the necessity of cross-cultural training.
7. Conclusion: Synthesizes findings to offer final strategic recommendations for foreign companies aiming to succeed in the challenging Chinese business environment.
8. Bibliography: Lists all academic sources and internet references used for the research and analysis presented in the paper.
Keywords
China, Expatriation, Guanxi, Mianzi, Labor Law, Joint Venture, FDI, Management, Hofstede, Cultural Dimensions, Human Resources, Education, Labor Market, Economic Reform, Volkswagen
Frequently Asked Questions
What is the core focus of this research paper?
The paper provides a comprehensive analysis of the challenges German companies face when sending expatriates to China, integrating economic, political, and cultural perspectives.
Which thematic areas are central to this work?
The core themes include the Chinese political and economic landscape, the education and labor market system, labor law regulations, and deep-seated cultural concepts like Guanxi and Mianzi.
What is the primary objective of the authors?
The goal is to analyze why foreign enterprises often struggle in China and to provide actionable best practices for companies to improve their expatriation strategies.
Which scientific methods are employed?
The research relies on an extensive review of literature, existing cultural frameworks (Hofstede, Hall, Kluckhohn/Strodtbeck), and the analysis of practical business case studies from Bosch and Volkswagen.
What topics are discussed in the main body?
The main body covers a broad spectrum, ranging from the development of the Chinese education system and the labor market to specific challenges in workplace democracy and negotiation tactics.
Which keywords best characterize this document?
Key terms include China, Expatriation, Guanxi, Mianzi, Labor Law, and FDI.
How does Mianzi influence business relationships in China?
Mianzi, or "face," is critical as it dictates social harmony and prestige; losing face can result in the termination of business relationships, making it essential for expatriates to act cautiously.
Why is the "deputy system" mentioned in the Volkswagen case study?
The deputy system was implemented as a know-how transfer mechanism where a German expert was paired with a Chinese counterpart to train them, though it often served as a source of cultural friction.
What role does Guanxi play for new enterprises in China?
Guanxi is identified as absolutely vital, particularly during the foundation stages of a business, as it helps in securing partnerships and navigating bureaucratic hurdles.
- Citation du texte
- Christian Brockmann (Auteur), Carsten Dietrich (Auteur), Dirk Salmon (Auteur), Daniel Scholz (Auteur), Alexander von Reth (Auteur), 2009, Expatriation in China, Munich, GRIN Verlag, https://www.grin.com/document/141077
