International Human Resource Management

INTERNATIONAL HUMAN RESOURCE MANAGEMENT 1
International Human Resource Management
Name:
Institution:
Course:
Tutor

INTERNATIONAL HUMAN RESOURCE MANAGEMENT 2
Introduction
Over the past decades, China's economy has grown to be the second after the United
States in the whole world. The rapid development in China is attributed to technological
advancement, increased foreign investment, and enhanced productivity, as well as new potential
market opportunities, thus becoming their largest trading nation after the US and Germany. (Gao
& Banerji 2015) China’s potentiality thus provides numerous multinational cooperation’s with
the opportunity to expand into the China market. The following report explores the expansions of
Xikron’s store from the US into the Chinese market. The report takes into consideration
Chinese’s political, economic, social, environmental and legal factors that might influence the
operations of Xikron’s store. The report further analyzes the cultural difference between the US
and China and illustrate how these differences influence IHRM practices with examples from the
journal. The report consequently summarizes with recommendations on how I will accomplish
the recognized outcomes on the HR habits in the China subsidiary.
Political factors
China is a communist state according to the constitution; meaning that it is under
peoples’ self-governing dictatorship commanded by the salaried group and grounded on the
association of labor force and farmers. The Chinese government is composed of multi-party
collaboration and political consultation led by the Communist Party of China(CPC); thus both
the leading party and consultation parties take part in the country’s crucial decision making
aspects such as on political, economic, cultural; and social affairs.
Human rights -China does not pose well developed human rights safeguarding entire
country’s population. Human Rights Practices and International Religious Freedom Report of

INTERNATIONAL HUMAN RESOURCE MANAGEMENT 3
2007 indicated that China was still on the verge of abusing global human rights and norms as a
result of an inadequate legal system (Li, 2013). Some of the reported incidences entailed
restrictions speech, association, privacy, and workers’ rights among many others. These poor
human rights will affect Xikron’s employees who are being relocated to China to continue the
success of the organization. Most of the employee might have enjoyed protection from various
federal governments the US, an aspect that they might not get in China thus affecting their
productivity.
Political risk -China is regarded as one of the worst states in regards to political risk such
as confiscations, expropriation, and currency inconvertibility and contract repudiation (Noakes
2014). Other political risks arise amid the Chinese’ central government and the provincial and
local governments over numerous applicable laws thus disrupting numerous activities such as
business operations such as Xikron’s thus may end up making losses or closing down depending
on the frequency of the misunderstanding.
Cultural and social factors
China’s population is the largest in the whole world and continues to expand yearly with
about 15 million. The rapid growth rate in China is attributed to the drop in the death rate (Zhu
2018). The large population provides ready market to the Xikron Company’s product, enhancing
high probability of succeeding. The whole population is not based on race rather is based on a
cultural concept; thus all the Xikron company’s employees will be required to speak and behave
like a Chinese by adopting the cultural values. Chinese cultural values tend to be complex since
it is based on the pervasive influence of Confucian philosophy of the Chinese culture; which is
the core identity of the Chinese .The most important values in Chinese culture are based on the:

INTERNATIONAL HUMAN RESOURCE MANAGEMENT 4
family importance, Hierarchical structure of life, hard work and achievement and cultivation of
morality(Chung'ha 2012). The hierarchical structure observation in China is quite different with
that of UK, thus employees will be forced to submit to the authority in the country irrespective of
the country’s power distance index. The five official religions recognized by Chinese
government are Buddhism, Taoism, Catholics, Islam, and Protestantism; thus those that seek to
practice their religion outside the official ones are subject to intimation and harassment. This will
affect the Xikron Company’s employees as most of them are diverse from different parts of the
world with different religion and cultural believes, however, with good cross-cultural training,
the relocating employees will be able to work in the Chinese diverse culture.
Economic Factors
China has become one of the largest recipients of the world’s destination of FDI over the
past few years. China’s FDI now accounts for the 27% of the value added production, 58% of
foreign trade resulting in 4.1% national revenue collection. Over 100 countries now invest in
China as a result of the establishment of the FDI environment by the Chinese National
Development and Reform Commission (NDRC) in 2006. The proposal focused on the
relationship between foreign venture and security investment, thus instructed China to relax
limitations on overseas property enterprises.
Inflation rate refers to the general rise of products and services’ prices computed
alongside a average level of procuring power. The price increase rate of China has always been
dropping; for example, it dropped by 1.5% in 2009 compared to 2008. The falling price of
products tends to encourage consumer’s buying behavior thus spend a lot in purchasing of
products which ultimately affect the organization’s revenue collection (Lei, Yin & Zhao 2012).