Global HRM Strategy: Le Costbucks' Entry into the Chinese Market

This report analyzes the environment of China for Le Costbucks, a French coffee bar, expanding its business with a focus on cultural differences. It addresses linguistic and cultural challenges, recommending a geocentric HRM approach for operating in the Chinese market. The report explores ethical issues faced by migrant employees and issues related to terms and conditions of employment within a subsidiary store. It emphasizes the importance of adapting HRM practices to align with Chinese culture, including collectivism and continuous learning. The report also discusses international staffing strategies, justifying the use of a geocentric staffing strategy. Ultimately, the report offers recommendations for Le Costbucks to ensure profitability and a safe workplace environment while navigating cultural and ethical complexities in China. Desklib is a platform where students can find solved assignments and study resources.

Running head: GLOBAL HUMAN RESOURCE MANAGEMENT
Global Human Resource Management
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Executive Summary
The purpose of this report is to analyse the environment of China in terms of expanding
business based on European culture. A French coffee bar, Le Costbucks has planned to
explore Asian market with French delicacy targeting customers with utmost interest in
foreign cuisine. However, while researching over the market it has been observed that
cultural differences is one of the crucial issues if Le Costbucks is going to aim profitability
and safe workplace environment for employees from different background. Addressing
lingual and cultural differences, HRM practices have been discussed. Geocentric approach
has been suggested to operate the business within Chinese setting of market. Moreover, this
report has explored ethical issues faced by migrated employees and issues related to terms
and conditions of employment within a subsidiary store at foreign field.

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Table of Contents
Introduction................................................................................................................................3
Overview of Le Costbucks.........................................................................................................3
Question 1..................................................................................................................................4
National Culture of France.....................................................................................................4
National Culture of China......................................................................................................6
Significance of the cultural differences for the HRM approach............................................7
Question 2..................................................................................................................................8
International Staffing Strategies.............................................................................................8
Justification for the use of the geocentric staffing strategy..................................................10
Question 3................................................................................................................................11
Ethical Issuesrelevant for a European MNC setting up business in China..........................11
Migrant workers and employment conditions......................................................................11
Migrant workers...................................................................................................................12
Employment terms and conditions.......................................................................................13
Conclusion................................................................................................................................13
Recommendations....................................................................................................................14
References................................................................................................................................16

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Introduction
As opined by Moore (2016), the process of internationalisation or globalisation and
the extensive usage of different kinds of innovative technologies had drastically changed the
nature of the contemporary business world. Wales et al.(2019) are of the viewpoint that the
different business firms with the objective to earn a higher amount of profit are increasingly
expanding into the business markets of the diverse emerging nations. However, there are
various factors that the business firms expanding into the business markets of other emerging
nations need to take into effective consideration. One of the most important factors in this
regard is the difference in the national cultures of the host nation and the parent nation of the
business firm (Boscari et al., 2018). This is important because of the fact that the business
style of a particular nation is greatly influenced by the element of national culture.
The entity of national culture also plays a pivotal role in determining the nature of
products or services that the concerned firm would offer to the customers, the kind of
international staffing strategy that they need to adopt in the host nation, corporate social
responsibility (CSR) policies and others (Vaiman & Holden, 2015). In this regard, it can be
said that failure to take the element of national culture into effective consideration can not
only significantly affect the level of success attained by a firm in a host nation but at the same
time can cause substantial business losses as well. This report will analyse the manner in
which the element of national culture and ethical issues mould the HRM approach as well as
policies followed by a firm in a host nation in the particular context of Le Costbucks’
intended expansion into China.
Overview of Le Costbucks
Le Costbucks is a coffee bar chain in the nation of France and is reputed for the high
quality of pastries and coffee that it offers to the customers. More importantly, one of the

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unique aspects of the products offered by the bar chain under discussion here is the fact that
the war materials used by it like coffee beans and other ingredients are completely organic in
nature which in turn contributes a unique taste to the coffee, pastries and other food products
offered by the bar chain. In addition to this, it is seen that the bar chain under discussion here
offers organic food products and coffee to the customers keeping into perspective the
increasing number of diseases or health ailments that the people of the present times are
subjected to. Moreover, it is seen that the bar chain for the improvement of its brand or
marker image and also to contribute in an effective manner towards the nation, planet and the
society takes the help of different kinds of CSR activities like the use of ethically sourced
organic ingredients, raw materials and others. It is pertinent to note that because of this stance
the bar chain had been able to achieve a significant amount of success in the recent times and
as a matter of fact is currently operational in the nations of Spain, UK and Italy. Furthermore,
in the light of the success that the concerned bar chain had been able to attain in the above
mentioned nation it is planning to expand its business in the nation of China, particularly in
the city of Beijing.
Question 1
National Culture of France
The nation of France in the recent times had emerged as one of the most important
European nations and the national culture of the concerned nation is in synchronicity with the
culture which is being followed within the majority of the nations of the continent of
Europe(Lasserre, 2017). An analysis of the national culture of France on the framework of
Hofstede’s national culture model would reveal insightful information-

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Figure 1: France on Hofstede’s national culture model
Source: Hofstede’s Insights, 2019
The high score of the nation on the aspect of individualism means that the people of
the nation are highly individualistic in nature and thereby do not like to work in groups or
undertake group projects (Hofstede Insights, 2019). This is perhaps one of the major reasons
why the different workplaces of the concerned nation try to foster an individualistic
workplace culture wherein the workers would be able to perform as per their maximum
potential (Usunier van Herk & Lee, 2017). Furthermore, low score of France on the index of
masculinity is an indication of the fact that the people of the concerned nation are not highly
motivated by the concepts of competition, success, achievement and others (Hofstede
Insights, 2019). In addition to these, the high score of the nation on the index of uncertainty
avoidance can be explained on the basis of the fact that the French people do not like
surprises or uncertain events (Hofstede Insights, 2019). This is perhaps one of the major
reasons why the different business firms of the concerned nation do not like to take the help
of different kinds of innovative technologies or strategies the success or the failure of which
is uncertain (Davies, 2016).
The senior managers or the members of the higher management teams are not always
approachable in the various French business firms and also seniority is being maintained in a

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sacrosanct manner in the workplaces of the concerned nation (Vaiman & Holden, 2015). This
is perhaps one of the main reasons for the high score of the concerned nation on the index of
power distance. Furthermore, the high score of the nation on the index of ‘long-term
orientation’s can be explained on the basis of the fact that the French society is a pragmatic
one and the notions of situation, context, time and others are important(Hofstede Insights,
2019). Lastly, the low score of the concerned nation on the index of indulgence means that
the French people are less relaxed and also the constructs of work-life balance and others
which contribute to high employee job-satisfaction are missing in the diverse workplaces of
the nation (Hofstede Insights, 2019).
National Culture of China
The nation of China is one of the most important emerging nations of the world and
the national culture of China is in synchronicity with the culture which is being followed in
the different Asian nations (Adekola & Sergi, 2016). An analysis of the nation of China on
Hosfstede’s model of national culture would reveal the following facts-
Figure 2: China on Hofstede’s national culture model
Source: Hofstede’s Insights, 2019

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The high score of China on the index of power distance just like the nation of France
is an indication of the fact that seniority is being maintained in an ardent manner in the
different workplaces of the concerned nation and also the seniors are not always
approachable (Hofstede Insights, 2019). Secondly, the low score of China, unlike the nation
of France, on the quotient of individualism means that the people of the concerned nation like
to work in a collective manner rather than in an individualistic manner (French, 2015).
Thirdly, the high score of China in the masculinity section, unlike France, means that the
Chinese people are more likely to be motivated by the concepts of success, achievement,
competition and others (Hofstede Insights, 2019). Fourthly, the low score of China on
uncertainty avoidance index means that the people of the concerned nation are not afraid of
surprises and in turn are risk taking (Zhang & Iles, 2013). Fifthly, the high score of the nation
of the index of long term orientation means that the society of China is a normative one and
education is generally seen as an essential ingredient to future success (Hofstede Insights,
2019). Lastly, the low score of the concerned nation on indulgence section means that the
people of the nation are more relaxed and get adequate time to enjoy their lives (Venaik &
Brewer, 2013).
Significance of the cultural differences for the HRM approach
The difference in the national cultures of the two nations under discussion here clearly
reveals the fact that the HRM approach taken by the bar chain “Le Costbucks” in China
would not only be different but at the same time in synchronicity with the national culture of
China. For example, the bar chain under discussion which had been following an
individualistic workplace culture in the nation of France and this HRM approach had enabled
the chain to attain a significant amount of success. However, the chain would have to change
this HRM approach and adopt a new HRM approach in the nation of China which would
promote collectivism and collective work culture in synchronicity with the national culture of

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China (Vaiman & Brewster, 2015). More importantly, it is seen that the people of China get
motivated by the concepts of success, competition, achievement and others and thus the
HRM team in the concerned nation would have to ensure that it effectively uses concepts for
motivating the workers so that they can maximise their performance (Lee & Tang, 2017).
Chinese people like to take the help of different kinds of innovative technologies for
the completion of their job roles and they show propensity towards the use of different kinds
of innovative strategies in which there are certain elements of risks involved (Li, 2014). Thus,
the HRM team of the concerned chain in China would have to foster a continuous learning
culture within the workplace and also ensure that different kinds of technologies are available
to the workers through the use of which they can complete their work in an effective manner.
Moreover, the normative nature of society which exists within the society of China means
that the bar chain would have to offer regular trainings to the workers for the completion of
the different job roles which are allocated to them (Lee et al., 2014). These in short are some
of the major changes that the HRM team of the concerned bar chain would have to make in
their approach in the nation of China.
Question 2
International Staffing Strategies
Paul and Mas (2016) have articulated the viewpoint that the prospects of a business
firm in a host nation greatly depends on the kind of staffing strategy that it follows for the
staffing of the employees or the workers within the framework of the concerned firm. As
opined by Johnson and Buckley (2015), one of the most important challenges or issues that
the business firms during the process of international expansion is the fact that they are often
in a dilemma as to whether they should offer the important designations of the firm to the
local individuals of the host nation or they should take the help of expatriate employees from

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their own parent nation. This is important because of the fact that if the firm does not offers
important designations to the employees from the host nation then they are likely to feel
dissatisfied and also feel that they capabilities or talents are not being recognised by the
concerned firm (Plakhotnik et al., 2015). On the other hand, one of the most important
motivating factors for the firms to take the help of expatriate employees is the fact that they
already have first-hand knowledge about the working mechanisms, strategic goals or
objectives, vision and other attributes of the concerned firm and thereby would be able to
handle the business activities of the concerned firm in the host nation in an effective manner
(Horwitz, Budhwar & Morley, 2015).
Demirtas and Akdogan(2015) are of the viewpoint that three of the most commonly
used international staffing strategies by the different business firms in the host nations of their
operations are the ethnocentric approach, polycentric approach and geocentric approach.
According to Dasen, Mishra and Wassmann(2018), ethnocentric approach of international
staffing is the one in which the business firms for the purpose of staffing of important
management designations and others of their firm in the host nation sent expatriates from
their own parent nations to fill up these designations. The primary motive of the firms behind
the usage of this method of staffing is to ensure the fact that the work of the firm in the host
nation is being done in an effective manner (Gu, Tang & Jiang, 2015). More importantly, it is
seen that if the firms appoint employees from the host nations then they would have to invest
a significant amount of time as well as resources to acquaint them with the firm’s policies,
strategic goals or objectives, the manner in which the work of the firm is being completed
and others(Dhar, 2015). On the other hand, Brewster, Mayrhofer and Smale(2016) have noted
that the polycentric staffing approach is the one in which the employees from the host nation
are being appointed to the top management and other important designations within the
framework of the firm in the host nation. One of the most important aspects of this staffing

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approach is the fact that since the top management employees are from the host nation itself
they are being able to manage the performance and other aspects of the operations of the firm
in the host nation in an effective manner by way of their understanding of the host nation
(Björkman et al., 2014). The usage of this staffing approach ensures that the firm does not
face any significant cross-cultural issues in the host nation because of the differences in the
national cultures of the two nations.
According to Davies(2016),the geocentric approach of staffing is the one in which the
top management designations and others are being assigned to the individuals who are best
suited for the job regardless of the fact whether they are from the host nation or the parent
nation of the firm. Vaiman and Holden (2015) are of the viewpoint that the reason why this
approach had gained a significant amount of prominence within the contemporary business
world and also is being extensively used is because of the fact that it promotes competition
and is highly flexible. However, at the same time it is seen that there are various difficulties
that the international business firms face for the effective implementation of this staffing
approach, immigration policies, diversity management, cost of worker relocation and others
(Lasserre, 2017).
Justification for the use of the geocentric staffing strategy
The best staffing strategy that the bar chain Le Costbucks can use for the allocation of
the important management designations and others for their coffee bar chain in China is the
geocentric approach. The use of this approach would help the bar chain to allocate the
different important designations within the firm to the individuals who deserve them the most
rather than allocate them to the individuals from their parent nations or from the host nation.
Furthermore, it would enable the bar chain to enhance the performance of the workers by way
of enhancing the competition level within the firm. More importantly, it is likely that through
the usage of this staffing policy neither the expatriates nor the employees from the host nation

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would feel dissatisfied and thereby there would be no grievances on their part that one person
or the other had been given undue advantage over the other (French, 2015). In addition to
these, as the above national cultural analysis of China and France reveals that the national
cultures of these two nations are greatly different from each other and thereby the usage of
this method would enable them to mitigate this issue in an effective manner. These in short
are some of the major benefits that the bar chain Le Costbucks is likely to derive through the
usage of the geocentric approach of staffing.
Question 3
Ethical Issuesrelevant for a European MNC setting up business in China
As stated byArmstrong, Francis and Grow (2017), in case a generic approach can be
conducted corruption has become a burning issue as the ideology of China’s communist party
do not go with recent market liberalization. The market is highly occupied ill-practices like
bribery, theft and cheats against public funds. The problem is Chinese government is more
likely to invest on construction projects, offices and industries without prior insight. As a
result, they end up minimizing job opportunities for the natives. The high investment is
making foreign investors and migrators happy yet at the same time raising questions against
operational transparency of businesses irrespective of industry background.
Migrant workers and employment conditions
According to Lee et al. (2014), ethical insight supports an atmosphere where
challenges, innovative ideas and knowledge can be discussed all together. The collaborative
effort can be put in only when there is utmost need of implementing plans into reality. All the
migrant population who have been appointed to the organisation deserve to be respected no
matter from which cultural background he or she belongs to. However, it has been observed
that immigrants are the ones who are victimized be it through abuse or exploitation. As