HRM in an International Context

This report discusses the challenges and strategies of International HRM in the case study of La Costbucks planning to operate in China. It explores the pros and cons of CSR strategy in China, cultural differences between Italy and China, and effective IHRM staffing strategies.

HRM in an International Context

Executive summary
International HRM assist a business to select best employees who may assist to reach a
business towards success. In the same way the report is based upon case study of La CostBuck
who planning to operate in China and for that report provides both advantage and disadvantage
of using CSR in China, but it is beneficial for the company to use CSR policy. Further, there is
not huge difference between culture of Italy and China, therefore, it will be easy for the
company to operate in China without facing much challenges. Moreover, study provides
different IHRM staffing strategy that will assist the company to operate successfully in China.
Lastly, report provides difficulties which La Costbucks may face with regards to PCN and TCN
such that language barrier, money mismanagement but it provide solutions in order to overcome
the same.

Table of Contents
Executive summary..........................................................................................................................2
INTRODUCTION...........................................................................................................................1
DISCUSSION..................................................................................................................................1
Pros and cons of Pursuing a CSR strategy in China...............................................................1
Key Cultural differences between Italy and China.................................................................2
IHRM staffing strategy to adopt.............................................................................................5
Difficulties expatriates (PCN's & TCN's)..............................................................................6
CONCLUSION................................................................................................................................8
RECOMMENDATIONS.................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
International Human Resource Management (IHRM) is the method of acquiring,
allocating as well as utilizing the human resource at global business in order to attain the defined
aim and objectives. Therefore, IHRM has three main dimensions such that HR activities,
employees and countries in which they operates. So through IHRM company satisfy employees
and hire diverse workforce that also lead to create positive working environment. In the same
way, the current report assist to understand the importance of International Human Resource
management and different challenges faced by the company while operate at other country.
Moreover, report is based upon the case study of La Costbucks which is an Italian coffee bar and
provides organic high quality of coffee and Italian Pastries. Quotes firm is planning to open its
stores in Shanghai and Beijing (China).
Thus, present study describe the challenges that La Costbucks will face which includes
the advantage and disadvantage of CSR strategy in China, cultural differences between Italy and
China and its impact upon the HRM. Further, report also describe the best and effective IHRM
staffing strategy that La Costbucks may adopt and then it provides the difficulties expatriate
(PCN and TCN ) may face with an idea of overcome the same.
DISCUSSION
Pros and cons of Pursuing a CSR strategy in China
There are different CSR policy that are indulging in China but it also have both positive
and negative impact upon the society such that:
Advantage: The key advantage of using CSR policy in China is such that it assist to
raise the brand image of the company and with an effective stakeholder's need, it will aid to
improve the overall business in affective manner. Moreover, another advantage of using CSR
policy within a business is such that it brings customers loyalty which in turn help to engage
customers within a firm. Or else, it also lead to improve the quality of offered products within a
firm as well as attract new customers towards it. Overall, pursuing CSR strategy will help to
making profit as well as attract investor who help to improve the overall financial condition o
business (Benefits of CSR for company, 2016). In addition to this, if La Costbucks also use CSR
policy then ethical values of a business also attract wealthy businessmen who may also
contribute their best to raise company's success and growth.
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Solanki and Shrivastava (2018) also stated that becoming a socially responsible does not
only involve cost and charities but it also brings benefit for society, as a result, it will help the
company to stay ahead in the competition. Moreover, through proper CSR policy will assist to
shape the proper relation with all stakeholder and it also increase morale of employees too.
On the other side, implementing CSR policy and living by it also forces companies to set some
standards as well as control over worker. So the biggest advantage of using CSR policy is such
that mitigate the risk and avoiding the legal actions as well.
Disadvantage: The biggest disadvantage of using the CSR policy in China is Cost
because in order to establish best CSR policy within the business, it require additional cost and
along with that, it also increase the number of expenses such that training, investing in programs
etc. Therefore, CSR leads to increase the overall cost and expenses for company. Competitive
disadvantage is another challenges because an organization also establish CSR which incur
more cost to finish and also complete their task, but on the other side company who do not
comply with CSR then they provide low cost products. Thus, it lead to create competitive
disadvantage in the market (Podkorytova, 2018). Impact upon the reputation of the
corporation is another con which is also face by the company while using CSR policy in China.
It is so because when a firm establish a concept o CSR, they bound to share variety of
shortcoming for their own product and this in turn affect the overall business in opposite
manner.
Clashing of business objectives is another disadvantage because CSR require
cooperation to keep the interest of people into consideration which further lead to cause conflicts
and also affect the important decision in negative manner as well. Therefore, it leads to affect the
overall brand image of the company in opposite way too.
Key Cultural differences between Italy and China
Using Hofstede Cultural dimension model, it is easy to determine the cultural difference
between two country. In the same way, La Costbucks also apply the same which is as mention
below:
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Power Distance Index (PDI): This express the degree through which less powerful
members may accept and power is also distributed unequally. This dimension state how society
may handle inequalities among people. Thus, the score of Italy is 50 while score of China is 80.
So score of Italy shows that control and formal supervision is normally disliked among younger
generation who actually prefer for teamwork as well as have management style (Hofstede
Cultural dimension, 2018). In this, people need justification for in inequalities. While on the
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Illustration 1: Hofstede Cultural dimension score rate of Italy
Illustration 2: Hofstede Cultural dimension score rate of China

other side, China have higher ranking which state that inequalities among people are acceptable.
Such that high number also reflect that they accept hierarchy so that every member feel their
own importance within limited space.
Individualism vs Collectivism (IDV): In this individualism refer to the candidate who
prefer to take care of only themselves and families, while Collectivism means to work in a
group. The score of individualism in Italy is 76, while in China it is 20 only. Thus, in Italy,
people take care of themselves and family as compared to others and for them their own
personal ideas and objectives are more important. While in China, due to having low number of
individualism reflect that people prefer to work in a group and thus, personal relationship
dominate over the task as well as company (Beugelsdijk, Kostova and Roth, 2017).
Masculinity vs Femininity (MAS): The masculinity side refers to the achievement,
heroism and material reward for success. On contrary, femininity represent the preference for
cooperation, modesty and quality of life. So, the score rate of Italy is 70 (Masculine) that shows
that it is high success oriented and thus, Italian people also show their success by maintaining
high profile status. On the other side, China has 66 masculinity score rate that shows that people
work for late night in order to earn good. While leisure time is not so important for the Chinese
people and they only think about success. On the other side, in both countries, workers also
leave their family for the search of better work and pay (Huang and Crotts, 2019). This shows
that there is a tough competition and that is why, they people have to take action accordingly.
Uncertainty Avoidance Index (UAI): It express the degree in which people feel
uncomfortable with some uncertainty. Therefore, this shows that how society deals with the fact
and the way to control the future as well. The score rate of Italy is 75 which is high score that
means Italians are not comfortable in indeterminate situation. Moreover, in Italy, the
combination of high masculinity and high uncertainty avoidance makes the life more difficult as
well as stressful. Thus, to release from such situation, company provide breaks and long meal
(Kim, 2017). On the other side, China have low score of uncertainty i.e. 30 where people wants
to comply with laws and rules and Chinese people are adaptable and as a result, they consult
with others while making any decision.
Long term orientation vs Short term Orientation: Every society has to maintain link
through their past at the time of dealing with present and future. So when society score low that
means prefer to maintain timely tradition and when they score high, use pragmatic approach, So,
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the score of Italy is 61 which shows that they follow pragmatic approach and also show an
ability to adapt tradition easily by changing condition by strong propensity to save and invest
(Tayeb (2005). While China have 87 score rate which also represent pragmatic approach.
Therefore, both countries encourage frugality as well as efforts in the modern education so that
they will prepare for a future.
Indulge vs Restraint (IVR): Indulgence stands for the society which allow people to
enjoy their life and have fun. While restraint refer to some control that keep affecting the overall
performance of the society. Therefore, the score rate of Italy is 30 which indicate that it is
Restraint. So society with low score rate in this dimension have a tendency to pessimism and
thus, if the country have restraint society then they do not put leisure time and control (Malcolm
Warner 2010). While on the other side, China is also restraint because it also have low score i.e.
24. So it is also clearly reflected that people with the orientation also have a perception that their
action are restrained by the social norms and they also feel that indulging themselves is quite
wrong. So, this cultural dimension may create opposite impact upon the business and that is
why, HR of La Coastbucks should take actions accordingly.
From the above, it is clear that opening a store In China is good because the cultural
dimension of both Italy and China is quite similar and therefore, it also leads to creates positive
impact upon the HRM practices as well. Both countries have similar cultural dimension that
reflect that company did not face much difficulties while deal at international level. Thus, by
applying this model will assist La Costbucks to examine cultural difference but there is not
much difference between and as a result, it leads to creates positive impact HRM.
IHRM staffing strategy to adopt
There are three main type of International staffing strategy which HR of La Costbucks
may adopt such that:
Ethnocentric Staffing: In this method, the company only focus on the norms and
practice of the parent company in which upper management position is affected by the corporate
personnel from the home country. But this approach is not used by quoted firm because manager
consider parent company as a nationals and they did not recruit employees from other country
except home country (Lakshman, Lakshman and Estay, 2017). On the other side the main
benefit of using this approach is such that it will allow the firm to make sure that employee in
the top position are experience within a business. This is only held when the host country does
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not have enough qualified workers for staffing the top position. Or else, if the company used this
method, then it make sure that culture of entire organization is unified rater than diversified.
Polycentric Staffing: This approach mainly focus upon the norms of host country and
this approach is also assist organizational learning in local market and then provide better
opportunities in order to improve the career through promotion methodology. On the other side,
this promotion is quite limited within some position but it did not involve top position (Torbiörn,
2017). On contrary, if La Costbucks uses this approach then it will lead to create performance
gap between managers as well as overseas manager in a home country.
Geocentric staffing: This method help to assign the job position to any person who is
best suited for the organization without considering their culture, background and country of
origin. Through this method, employees may understand importance of diverse culture and it
also leads to highly flexible (Zhu, 2019). On the other side, this method also assist to increase
the cultural knowledge related to different market and countries, but in the same time,
immigration policy and cost of worker relocation also affect the overall business.
Regiocentric staffing: This method is mostly used by the company in which employees
are generally selected from the specific region. Though this method is actually similar to
polycentric approach but in the same time it is also reflect region as compared to specific
country. For example, most of US based company in Mexico generally prefer to choose Candian
people for management role. Thus, it reflect that company choose specific region who belongs to
same country.
Among all, HR of La Costbucks may uses Geoccentric Staffing approach because it will
assist to get best and qualified workers who may lead a business towards success. Or else,
company may also Regiocentric approach as well because this method assist to raise the salary
and benefits requirements and it is easy for the employee to work under the similar cultural
company without facing any key challenges (Zheng and Smith, 2019). Thus, through this
method company may get better talent pool and helps in development of international expertise
at global level which in turn assist to successfully planning to operate in China.
Difficulties expatriates (PCN's & TCN's)
Pokharel, (2016), established the fact that, Parental country national (PCN) in turn is
referred to as a person who has been working in a country other than the origin of the country.
On the other hand, Third country national (TCN) is referred to as the citizen of one country who
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in turn has been employed by the company the country who tends to work in a third country. It
means, the nationality of the employee within TCN in turn is neither that of the country where
the company is headquartered, not belongs to the location where subsidiary of the company is
established. Cultural conflict in turn is considered to be as one of the major challenge which is
faced by the expatriates at the time of adapting China. This in turn results in lower operational
growth and performance of the company. A cultural dimension in turn is considered to be as one
of the major issue because the culture in China and the culture in Italy are way to different (Rees
& Smith, (2017)). There seems to be both socio- logical and psychological disparities. In order
to overcome cultural conflicts, each employees within PCN and TCN must in turn focus on
respecting the differences of each individuals. This in turn helps in adapting and understanding
the various cultural differences by becoming self aware about the various cultural differences.
The management of the organization must in turn tends to focus on providing cross cultural
training to the expatriates which in turn helps in attainment of higher operational goals and
objectives.
McNulty & Vance, (2017) sought to determine that, Another major difficulties in turn
which has been eventually faced at the time of adapting La Costbucks business in china is linked
with communication barrier. In order to overcome such barrier they in turn must focus on
effectively learning basic language of both Italy and China. This helps in removing the gap
associated with the communication barrier. The employees within the La Costbucks must in turn
also focus on determining the common ground of language i.e., English which in turn is very
useful in transmitting various set of information from one person to another. The problem
related with the language and communication styles in turn has imposed a major issue which in
turn results in creating major issue. Strandberg, (2017) sought to determine that, the employees
in turn must have given proper training to learn and understand new language. This in turn leads
to higher operational growth and sustainability. Chinese business environment in turn is
considered to be one of the major issue in establishing business. In order to overcome such issue,
the management of the La Costbucks must in turn focus on effectively evaluating the various
market and environmental forces which in turn helps in making strategic business plan to carry
out business in an ethical and desirable manner.
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CONCLUSION
By summing up above, it has been concluded that International Human resource
management plays an important role in the success of the business. Further, report also
concluded that CSR policy, in China company cause both positive and negative impact upon the
company such that high cost, brand image at global level. While on the other side, it is also
concluded by using Hofstede cultural dimension that both Italy and China have similar score rate
that shows that if La Costbucks will planning to operate its business at China then it did not face
any extra challenges because of possessing similar score rates.
On the other side, it is also concluded that report present different International Human
Resource Management staffing strategies but among all, Regiocentric and Geocentric are
beneficial because it may leads to attract range of new employees towards it and this In turn
leads a business towards success direction. Further, report also concluded that company also
may faces different challenges while expatriate such that language barrier, finance and money
management that affect the overall business while expanding the business in China. In the same
time, company should develop training session in order to overcome the issue.
RECOMMENDATIONS
From the above, it is clear that there are some challenge which HR of La Costbucks may
face while planning to expand its business at China, so there are list of different
recommendations which must be follow by the company. These are as mention below:
 Effective training session should be provided by the company to employees in order to
minimize the issue of language barrier. Therefore, trainer should know all the language
so that they will able to solve the question in better manner.
 On the other side, proper laws and regulation should be comply by La Costbucks and
before that make a list of all the laws and regulation that do not cause any negative
impact upon its business operations.
 It is also recommended to the firm that it may use external recruitment strategy that assist
to hire the talent pool for the company and this in turn also create to reach wide range of
new customers towards it. Moreover, This method of recruitment also create positive
impact upon customers and society and this in turn assist to raise brand image of the
company at global level.
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REFERENCES
Books and Journals
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level culture research in international business since 2006. Journal of International
Business Studies.48(1). 30-47.
Huang, S. S., & Crotts, J. (2019). Relationships between Hofstede's cultural dimensions and
tourist satisfaction: A cross-country cross-sample examination. Tourism management. 72.
232-241.
Kim, S. (2017). National culture and public service motivation: investigating the relationship
using Hofstede’s five cultural dimensions. International Review of Administrative
Sciences. 83(1_suppl), 23-40.
Lakshman, S., Lakshman, C., & Estay, C. (2017). The relationship between MNCs’ strategies
and executive staffing. International Journal of Organizational Analysis.
Malcolm Warner (2010): ‘In search of Confucian HRM: theory and practice in Greater China
and beyond’. The International Journal of Human Resource Management, 21:12,
pp2053-2078
McNulty, Y., & Vance, C. M. (2017). Dynamic global careers: A new conceptualization of
expatriate career paths. Personnel Review.
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of CISCO Systems. In Russian Regions in the Focus of Changes: Conference
proceedings.—Ekaterinburg, 2018 (pp. 30-35). LLC Publishing office EMC UPI.
Pokharel, B. (2016). Triumph over failure of expatriate in an international assignments from the
international human resource management perspective. International Journal of Business
and Management.11(5). 310.
Rees, C., & Smith, C. (2017). Applying critical realism to the MNC: Exploring new realities in
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millennium perspectives.49. 265-293.
Solanki, N. & Shrivastava, P. (2018). CSR: Are people conscious for themselves. ZENITH
International Journal of Business Economics & Management Research.8(8). pp.45-51.
Strandberg, C. (2017). The role of human resource management in corporate social
responsibility.
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Tayeb, M. H. (2005) International Human Resource Management: A Multinational Company
Perspective, Oxford, University Press.
Torbiörn, I. (2017). Staffing policies and practices in European MNCs: strategic sophistication,
culture-bound policies or ad hoc. International Human Resource Management: A Critical
Text.47.
Zheng, Y., & Smith, C. (2019). Tiered expatriation: A social relations approach to staffing
multinationals. Human Resource Management.58(5). 489-502.
Zhu, J. S. (2019). Chinese multinationals’ approach to international human resource
management: a longitudinal study. The International Journal of Human Resource
Management.30(14). 2166-2185.
Online
Benefits of CSR for company. 2016. [Online]. Available through:
<http://jcrl.umk.pl/files/7815/0102/1176/ksiezak.pdf>.
Hofstede Cultural dimension. 2018. [Online]. Available through: <https://www.hofstede-
insights.com/country-comparison/italy/>.
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