IBS804 - Managing HR Challenges for Zespri in Global Environment

This report provides a comprehensive analysis of Zespri's human resource management challenges in the Chinese market, addressing issues such as lack of trust in employees, non-compliance with regulations, insufficient employee background checks, and an ineffective HR management system. The report delves into the background of Zespri's operations in China, highlighting scandals and controversies that have negatively impacted its business. It then proposes solutions focusing on effective recruitment strategies, including ethnocentric, polycentric, and geocentric approaches to staffing, emphasizing the importance of considering both language skills and cultural dimensions. Furthermore, the report recommends comprehensive training and development programs, along with a robust compensation management system tailored to the local market. The report also underscores the significance of performance appraisal and provides recommendations for how Zespri can improve its HR practices to enhance productivity and competitiveness in the international market. The report also acknowledges the importance of performance appraisal and its role in motivating employees. Finally, the report emphasizes the need for Zespri to adapt its HR strategies to the specific cultural and regulatory context of China to ensure sustainable growth and success.

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Managing in Globalized World
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Managing in Globalized World 1
Contents
Introduction......................................................................................................................................2
Background of Case.........................................................................................................................2
Problems with Zespri.......................................................................................................................3
Solution............................................................................................................................................4
Conclusion.......................................................................................................................................9
Recommendation.............................................................................................................................9
References......................................................................................................................................11

Managing in Globalized World 2
Introduction
The purpose of this paper is to enlighten details about the case of the company Zespri to the
reader in the environment. The report evaluates details about the background case of the
company along with the issues faced by the company and conducted by them while performing
business functions in the external environment. Zespri’s operations in the country are analysed in
the paper. Further, it should be noted that human resource management of the company is the
most crucial resource that the business holds. This resource of the company helps them to make
use of other resources and significantly grow in the external international environment and be
competitive as well. Issues faced by the human resource management of company makes it
difficult for the management to secure their position in the environment and initiate activities
according to the expectation in the environment (Thompson 2019). The below mentioned paper
highlights the mandatory details about the human resource management issues of the company
Zespri. Further, solutions to eliminate the issues and support the business establishment are
provided in the paper. Successful change in human resource management activities of the
company Zespri will help the organization to improve the productivity effectively and grow in
the international market as well. More details about the paper are discussed below:
Background of Case
Zespri is an organization that deals in import and export of fruits products in the environment.
The case study evaluates the business operations of the company conducted in the country China.
The company was facing service ethical as well as legal issues in the environment of China due
to which the growth of company in the Chinese market was depleted. The company Zespri came
under several controversial issues that affected its current position in the Chinese market and
made the organization to pay several penalties as well. The first scandal of the organization in
the Chinese market was that an agent of the company was found guilty of double invoicing in the
year 2012. The agent was also evading the taxes by not paying the import duty of the goods that
were coming to China from outside market (Hill 2015).
The Chinese subsidiary of the company was fined with $1m and an employee of the company
was also jailed for five years because of not paying custom duty on the kiwifruit for the years

Managing in Globalized World 3
between 2008 to 2010. This was the first scandal that defamed the name of the company in the
external environment of China. Further, talking about the second scandal of the company, it
should be noted that 9 staff of the same agent mentioned above were arrested for not providing
custom duties in the environment and importing prohibited fruits in the country as well.
Resulting in which, the officials of the country held the staff in their custody because of
performing such acts in the business environment. After facing such issues in the market of
China, Zespri realized that all this is happening because the management does not have good
command on the Chinese employees (Irwin 2012).
The top management of the company decided bring more employees from their ground in
Chinese field. This activity will help the organization to increase the grip on the business
functions in China and save themselves from penalties as well. In China, the company has started
focusing on the quantity of the products rather than the quality of the product. The main aim of
the organization is to increase its sales and productivity in the market by focusing on the
distribution of quantity in the market at low rates. The company depleted rates of the goods
along with the quality as well, resulting in which customers in China started purchasing more
kiwifruit in the environment (Westropp 2015, 53). However, this practice of the company is
inappropriate because they are serving low quality goods in the market that can affect the health
of the customer on consumption.
Problems with Zespri
There are several problems affected with the functioning of the company Zespri, some of them
are mentioned above while analysing the background of the case. Further, below mentioned is
the clear elaboration of the human resource issues faced by the company Zespri in the market of
China:
 Lack of Trust on Employees: the company does not trust on the employees due to which
there is presence of communication barrier in the organization. Communication issues at
workplace give rise to several malpractices in the environment discussed above. If the
organization would have trust on the employees and if they would be able to effectively
communicate with them then the company would not face several other issues in the

Managing in Globalized World 4
organizational context. This human resource management issue of the company bring rise
to several other issues for them in the market of China (Zespri 2018).
 Problem on Non-compliance of regulations: the company does not comply with the rules
and regulation in the international market. The organization does not circulate the
important details in the environment due to which the employees does not get to know
about the details of the code of conduct of the organization and the rule that they need to
follow in the international market. Resulting to which, the business attract several
penalties as well (Seidel-Sterzik, McLaren, and Garnevska 2018, 2496).
 Lack of Employee Background Information: As the organization is new to the market of
China, so they should recruit the employees after getting details about the background of
the employees. This will help the organization to analyse the behaviour of the employees
and how they can make the employees work effectively in the organization. However, the
organization does not check the background of the employees before hiring them that
result in application of malpractices in the organizational context (Sparrow, Brewster,
and Chung 2016).
 Ineffective Human Resource Management System: lastly, it should be noted that the
company has ineffective human resource management system that does not manages all
the functions of the company properly. Resulting in which, issues arises in the business,
as the manager is unable to manage the interest of qualitative employees in the activities
of the company (Dalziel, et. al., 2018, 487-504).
Solution
Human resource management refers to the strategic approach that initiates effective management
of people present in an organization. The human resource management activities of the company
helps the management in keeping the mind-set of the employees in the right direction and
motivating in the help the business attain competitive advantage in the target market (Brewster,
Mayrhofer, and Farndale 2018). Further, below mentioned are the approaches to human resource
management that can help the organization in improving their position in the Chinese market:
Recruitment of Appropriate Staff

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Selection of staff is crucial human resource management activity for the business especially
when the company is placed in an international market. It is important for the organization to
choose the right type of employees for the organization because they are the people who uplift
the interest of the organization in the international market (Morschett, Schramm-Klein, and
Zentes 2015, 978-3658078836). Further, it should be noted that the company should make use of
three policies of staffing to choose the right candidate for them in the business environment;
these policies are ethnocentric, polycentric and geocentric. Ethnocentric staffing policy refers to
the recruitment approach in which the organization hires people from the place where the parent
company is situated. Under this system, the organization relocates the employees from the place
where the parent company is situated and then makes them work in the foreign location of the
organization (Greenhalgh, and Hart 2015, 205-215).
This activity would minimize the hiring cost of the organization and it will help Zespri to attain
better grip in the Chinese market. Polycentric approach refers to the recruitment approach in
which the business hires people from the local area to fill the positions in the host nation.
Thirdly, geocentric refers to the approach of staffing under which, the business hire the best
people to fill the position in the environment, regardless of location of the employees (Stone, and
Deadrick 2015, 139-145). The company should make use of geocentric approach because
location is one factor that affects the staffing of the company but talent is the most crucial aspect
of recruitment and selection process. The people of China use differential language so it is
important for the management to hire both English and Chinese speaking people in the business
environment (Dalziel, and Saunders 2018, 91-107).
Further, it should be noted that the organization recruits people in their business considering
several factors in the environment. So, while selecting expatriates from the organization, the
management will focus on several factors like organizational philosophy for recruitment,
relational abilities, family situation, personal characteristics of candidate and lastly technical
competencies.

Managing in Globalized World 6
Looking at the cultural dimension of both the countries, it should be noted that there high power
distance and long term orientation in China as compared to Brazil which means that power is not
distributed equally in the society and the people keep links with their past while working for
future.
Training and Development
Training and development is another human resource management process that helps the
organization in motivating the employees and making them performs their jobs in an effective
manner. The company Zespri should train the expatriates and local employees together in the
Chinese market. This will help the employees to gel up with each other easily and learn from
each other as well. Training process will help the employees to learn about the code of conduct
of the company and the ways in which the business they can initiate success of Zespri in Chinese
market. The expatriates and local employees both will get to learn more in the company of each
other. The company should train the employees about the ways in which they can make use of
differential geographic conditions and unique selling proposition of the company to attain
competitive advantage in the market of China (Noe, et. al., 2017). The company should train the
employees about the custom and excise rules prevailing in China.

Managing in Globalized World 7
Compensation Management
Compensation management is the most motivational factor for the employees because it is the
framework that decides the pay of the employees in an organization. The compensation and
benefit scheme helps the employees to attain a sustainable quality of life and benefits from
organization against the work provided by them in the business environment. The organization
provides medical benefits, loans, scholarships etc. to the employees also with their fixed salary to
as to keep the employees interested in the organization. Further, it should be noted that the
organization should finalize the compensation of the employees while considering several trends
in the market (Brewster, et. al., 2016). The company should focus on cost of living in the country
along with economic conditions of the country before deciding the pay of the employees. The
company should provide differential compensation to the employees present in different
branches of the country. Further, it should be noted that as cost of living in China is low, so the
local employees as well as expatriates attain less compensation in the environment. Thus it
should be noted that it is important for the company to pay extra to the expatriates otherwise they
will not stay with the company in long run (Reiche, et. al., 2016).
Performance Appraisal
It refers to the sum provided to the employees against the time they have stayed with the
organization. Performance appraisal is conducted on yearly basis by measuring the contribution
of the employees in a year and increasing their compensation accordingly. This is also one of the
biggest motivator for the employees to stay with the organization. The company Zespri should
motivate the employees in an unbiased manner; they should increase the compensation of the
employees on the basis of the work done by them throughout a year and their capabilities as well.
Further, it should be noted that the branch office of the company should conduct the performance
appraisal system and the head office should approve it (Cascio 2015).
Repatriation
Repatriation refers to the returning of expatriates from host branch of the organization to home
branch. It is one of the most crucial aspect on which the organization Zespri should focus. Under
this type of process, the expats come back to home nation after a fixed period of time. It is
crucial for the organization to implement the human resource management activities to take care

Managing in Globalized World 8
of interest of expats while they were in host branch and after they have been shifted to the home
branch of Zespri. The human resource manager of the company should change the rules and
guidelines for the expats when they return to their home nation. Further, after looking at the
condition of Zespri in China, it has become crucial for the organization to send the expat from
home nation to China, so the motive behind repatriation in the given case should be completion
of the foreign assignment of the employees (Bratton, and Gold 2017).
Communication Plan
As discussed above, that the organization face communication issues in the Chinese market, so
the company should train the employees to implement effective communication strategies in the
market. The company should make use of interactive communication technique to communicate
with the employees in the organization. This will help the top level management to circulate new
rules and regulations in the environment and it will also help the employees to express their
views and opinions to the top level management of the company. In this way, Zespri
management would be able to eliminate the issues faced by them due to lack of communication
(Lester, Virick, and Clapp-Smith 2016, 325-349).
Cultural Issues
Cultural issues are the issues that are faced by each and every organization in the business
environment. These are the issues that are mainly faced by the employees due to difference the
background of organization, country and other employees. The management of Zespri also faces
cultural issues in Chinese market, however they should eliminate the problem of cultural shock
by initiating cross cultural training in the environment. The organization should train the
employees to prohibit degrading the values of any culture and respect all the people irrespective
of difference prevailing in the environment (van Harten, et. al., 2017).
Ethical Issues
Lastly, it should be noted that the company faces ethical issue of corruption and tax evasion in
the market due to the behaviour of local employees and the government of the company. So, the
company should circulate the details about the code of conduct of the company and they should

Managing in Globalized World 9
penalize the agents and the employees who do not follow such guidelines of the organization
(Ayentimi, Burgess, and Brown 2018, 216-237).
Conclusion
Thus, in the limelight of above mentioned events, the fact should be noted that the report
highlights details about the human resource management activities of the company Zespri. The
company is being placed in the international market of China where they are struggling to
manage their position due to ineffective human resource management techniques in the
environment. The paper elaborated details about the background of the company along with the
issues faced by them. The solution is provided to the company considering the human
management activities that the business should implement in the external environment of China.
The report has elaborated different actions of human resource management like, recruitment and
training, communication plan, compensation etc. Information about these activities will help the
management to effectively increase the profitability of the company in the market of China.
Lastly, recommendations are provided to the company with the help of which they can
effectively increase their competitive advantage in China.
Recommendation
Below mentioned are the strategies recommended to the company Zespri that will help them to
achieve success in the market of Brazil:
 Implement recruitment strategies: the company should implement aggressive recruitment
strategies in the environment so as to manage the demand of goods and services in the
market. Recruitment of employees will bring positivity in the environment and it will also
promote the generation of new and innovative ideas for the organization to grow.
Diversified workforce will welcome brainstorming ideas and activities in the business
environment. It will also increase the productivity of the company (Welch, and Björkman
2015, 303-322).
 Implementation of change management activities: the company should implement the
change management activities in the environment so as to make the employees work
according to the objective of the company. Currently, Zespri in China is working

Managing in Globalized World 10
according to the expectations due to which the business is facing several penalties and
legal issues in the environment. Implementation of change management activities for the
company in Brazil will make the employees comfortable with the new direction of the
business and it will motivate them to implement such change in the environment for the
benefit of the organization on a whole (Collings, Wood, and Szamosi 2018, 1-23).
 Implement Market Research: the company is failing in the Chinese market because the
management has not attained adequate information about the new market before entering
in it. The host market is different from the home market so the organization cannot
perform same actions and expect the branch to survive in the new market. Thus, it should
be noted that thorough market research of Brazilian market is required to help the
organization survive in the new market.
 Performance Review: the organization should conduct performance review meetings in
every three months so as to make the employees look at their perform and judge whether
they are performing up to the mark or they need to improve. This type of technique will
help the organization to keep the employees interested in the activities of the company; it
will also eliminate the chances of mistake from the end of employees in an organization
(Rees, and Smith 2017).

Managing in Globalized World 11
References
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