THE CULTURAL CHALLENGES OF MNCS INVESTING IN CHINA
IN THE TWENTY-FIRST CENTURY
Universal approaches of management trust that few major differences exist among managers from different social and ethnical backgrounds and that management theories and practices can be easily transferred from one last to another (Chen, 2004, p1). This approach suggests that the corporate tillage and management systems that determine financial success in a companys home ground volition guarantee success in other countries. This trust is often erroneous. Due to the difference in history, geography, civilisation, infrastructure and the applicable political environment, management systems and best prac-tises in the home countries of prosperous MNCs often conflict with those in a host country. To assistant MNCs develop an efficient management system for the countries or part they operate in, management should instead use the cultural cluster approach which puts vehemence on how attitudinal and behavioural differences among cultures determine man-agement tasks (Chen, 2004, p2). In examining the challenges that are confronted by western MNCs in investing in chinaware, this essay leave firstly consider the meaning of cul-ture. Specifically, Hofstedes expanded concept of culture is defined, then applied to il-lustrate the sharp contrast in culture and business environments that MNCs face in China (Hill, 2003). At this point, the danger in stereotyping about Chinese culture is emphasised.
Guanxi, the unique constituent of Chinese culture, is discussed. The critical role that guanxi plays is illustrated through examples (Chen, 2004). Furthermore, the importance of de-signing culturally relevant employee incentive schemes in China is canvassed, as thoroughly as the Chinese method of conflict resolution. Then, the essay will define and historically explain the four different types of enterprise, individually with their differing corporate cultures. The challenges that different types of enterprise confront in China are considered. Finally, the essay seeks to explain why some MNCs...
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