Issues Faced by Chinese MNCs in Africa

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Abstract
The research focused on identifying the different management issues that are faced by the
Chinese MNCs’ while operating in the African markets. The problem that was researched in the
study was dependent on the contradicting ideologies of Chinese leadership style and the African
leadership style, which affected the performance of the workforce. The trade relationship
between China and Africa was based on the mutual interests of growth and profitability.
However, the authoritarian leadership of China contradicted with that of liberalistic and
humanitarian leadership of Africa. On the other hand, the biased management structure of
Chinese MNCs’ affected the belongingness of the skilled management personnel of Africa.
Therefore, the cross- cultural differences affected the capabilities of the Chinese organizations in
maintaining the efficiency of the operations in accordance to the sustainability needs of the same.
This study had chosen a mixed method analysis where both quantitative and qualitative analysis
has been conducted. The data has been analyzed using coding and inferential statistics. The study
had taken 50 respondents from the quantitative survey and 3 respondents from the qualitative
interview. The findings of the study showed that diversity and inclusion had high impact on
organizational outcomes. The conclusion chapter had linked the conclusion with the objectives to
provide effective recommendations. This strategies could be implemented by the companies to
improve their organizational culture and increase their productivity.

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Table of Contents
1. Introduction..................................................................................................................................4
1.1 Background of the research...................................................................................................4
1.2 Statement of the problem.......................................................................................................5
1.3 Aim of the research................................................................................................................6
1.4 Research objectives...............................................................................................................6
1.5 Research questions.................................................................................................................6
1.6 Research hypothesis...............................................................................................................7
1.7 Benefits of the research.........................................................................................................7
1.8 Scope of the research.............................................................................................................7
2. Literature review..........................................................................................................................8
2.1 Introduction to the problem...................................................................................................8
2.2 Management culture in Africa and China..............................................................................9
2.3 Differences in Management culture in Africa and China....................................................10
2.4 Initiatives taken by the Chinese MNCs’ in Africa and issues faced by same.....................12
2.6 Literature gap.......................................................................................................................16
2.5 Conclusion...........................................................................................................................16
3. Methodology..............................................................................................................................16
3.1 Introduction..........................................................................................................................16
3.2 Research philosophy............................................................................................................17
3.3 Research Approach..............................................................................................................18
3.4 Research Design..................................................................................................................18
3.5 Data collection and analysis................................................................................................19
3.6 Sampling..............................................................................................................................20
3.7 Reliability and Validity........................................................................................................21
3.8 Ethical consideration...........................................................................................................21
3.9 Summary..............................................................................................................................21
4. Findings and analysis.................................................................................................................22
4.1 Reliability test......................................................................................................................22
4.2 Quantitative Analysis...........................................................................................................23

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4.2.1 Demographic Questions....................................................................................................23
4.2.2 Question on Diversity, inclusiveness and organizational outcome..................................25
4.2.3 Correlation matrix.............................................................................................................34
4.2.4 Regression analysis...........................................................................................................35
4.3 Qualitative analysis..............................................................................................................36
4.3.1 Generalizations.................................................................................................................38
4.4 Summary..............................................................................................................................39
5. Conclusion and recommendations.............................................................................................39
5.1 Conclusion and key findings...............................................................................................39
5.2 Recommendations................................................................................................................40
References......................................................................................................................................42
Appendices....................................................................................................................................49
Appendix 1.................................................................................................................................49
Appendix 2.................................................................................................................................50
Appendix 3.................................................................................................................................52
Appendix 4.................................................................................................................................54
Appendix 5.................................................................................................................................58

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Topic: The issues and consequences that might be faced by the Chinese MNCs’ while
managing the operations in Africa
1. Introduction
1.1 Background of the research
The growth of the Chinese MNCs’ in Africa gained momentum within the last few
decades. Cooke (2014) noted that the developments in the trade relation between the two nations
are specifically dependent on the growth of manufacturing, agriculture, mining and construction
industries in Africa. The different changes that are undertaken by the Chinese management have
helped in increasing the employability rates in Africa. Xing et al. (2016) stated that China stands
as a second largest trade partner of Africa after US, which has helped the MNCs’ in facilitating
continuous ground. Kamoche et al. (2012) stated that the availability of cheap labor force and
the rich resource availability has helped the MNCs’ in undertaking dynamic growth procedure in
Africa. According to a survey, it was found that the continuous development of the Chinese
MNCs’ in the African markets has helped in boosting the employability by 85- 90% (Wang et al.
2017). However, Lin and Farrell (2013) noted that the rigid structure of the Chinese
management and the biasness of providing managerial positions to the Chinese personnel has
affected the operations of the MNCs’ through discontent among the African trained personnel.
According to Kolk and Lenfant (2013), the Chinese management style relates to Confucianism,
which is different from the culture that is followed by the African employees or firms. The
cultural differences and conflicts might affect the capabilities of the Chinese MNCs’ while
managing the operations in the African context. In this relation, the lack of cross cultural
understanding and biased management bodies of the Chinese MNCs’ might affect the

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capabilities of smooth functioning. Africa is taken as one of the fastest growing region in the
world with mineral reserves like oil, gold, diamonds, chromium and copper. On the other hand,
the existence of huge number of cheap labor force has attracted the attention of many Chinese
MNCs’ for developing their operations in the concerned continent. However, Cissé (2013) stated
that the lack of suitable cross- cultural understanding the differences between the management
style and expectations of the people might affect the capabilities of the Chinese MNCs’ in
maintaining the efficiency of the operations in the African markets. The differences in the
management approach of the Chinese and the African personnel have affected the capabilities of
growth and success factors of the businesses. However, the lower cost of operations and the
availability of wide range of resources have enabled the growth of the Chinese MNCs’ in the
African markets. Lack of suitable understanding of the cross- cultural management related issues
has affected the capabilities of the Chinese organizations while operating in the different
markets.
1.2 Statement of the problem
The research was undertaken with the view of assessing the advantages and the issues
that are encountered by the Chinese organizations while managing their operations in the African
continent. Firstly, the management related issues that are faced by the Chinese organization
related to the differences in the culture and biasness was discussed in the research. The lack of
understanding of the cross- cultural context threatened the capabilities of the Chinese MNCs’ in
maintaining the efficiency of the operations in accordance to the needs of the customers.
Secondly, it was noted during the assessment that most of the Chinese companies undertake
recruitment of the Chinese employees who face difficulties relating to skill shortages. The
deployment of the Chinese employees as expatriates in the African continent might affect the

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capabilities of the companies in managing the operations. On the other hand, it was also found
during the research that the biasness of the Chinese firms while recruiting the inexperienced
Chinese managers in place of the skilled African personnel created discontent among the
management personnel of Africa. It might also affect the capabilities of the Chinese MNCs’ in
maintaining the efficiency of the operations in accordance4 to the needs of growth and
expansion.
1.3 Aim of the research
The aim of undertaking the research is to examine the issues and consequences that might
be faced by the Chinese MNCs’ while managing the operations in Africa.
1.4 Research objectives
The objectives for the research study are:
 To examine the diversity management and inclusion issues faced by the Chinese MNCs’
while managing operations in the African continent
 To evaluate the impact of lack of diversity and inclusion on organizational outcomes
 To provide recommended actions that might be undertaken by the Chinese MNCs’ in
order to mitigate the issues that are faced by the same in the African continent
1.5 Research questions
The research questions are:
 What diversity management and inclusion issues might be faced by the Chinese MNCs’
while managing operations in the African continent?
 How does the lack of diversity and inclusion affect the outcomes of the Chinese MNCs’?

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1.6 Research hypothesis
H 0- Lack of diversity and inclusion does not affect the outcomes of the Chinese MNCs’
H 1- Lack of diversity and inclusion does affect the outcomes of the Chinese MNCs’
1.7 Benefits of the research
The study would help in understanding the current position of the Chinese MNCs’ in the
African continent. The research has enumerated the different issues that are faced by the Chinese
MNCs’ while operating in the African continent. On the other hand, the research also
enumerated the different recommended activities that might be undertaken by the Chinese firms
in order to maintain the efficiency of the management while operating in the African continent.
The delineation of the issues and the manner in which they might be mitigated would assist the
business firms of China in considering the modifications in the management approach of the
same. Therefore, the research will contribute to the understanding of the issues faced by the
Chinese MNCs’ while operating in the African continent and the manner in which the changes
might be implemented in order to facilitate the smooth functioning of the systems.
1.8 Scope of the research
The research has focused on identifying the different advantages and the disadvantages
that are faced by the Chinese MNCs’ while operating in the African continent. The research has
excluded the African companies. Moreover, the research also evaluated the different issues
related to diversity and inclusion that are encountered by the management structure of the
Chinese MNCs’ and the manner in which they might be mitigated. The research undertook the
evidence from articles written in the last 15 years in order to identify the different current issues
that are encountered by the organizations while operating in the African context. However, due