Globalize or Localize? Human Resource Management in American Multinational Corporation’s Chinese Sub

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Corporations are looking globally in order to fill strategic positions and as a result growing the company’s global workforce.This globalization trend and the complexity that is involved with conducting and growing an international business has led companies to seek business best practices for operating foreign subsidiaries.One important complexity to international business,is a company’s workforce,it’s people.Each country has its own specific and different geopolitical,legal,cultural and economic characteristics that need to be considered.These differences are what make the implementation of a strong human resource management function critical.From the conception of the field of international human resource management(HRM)in the mid-1980 s,an ongoing debate has emerged regarding the best approach to apply when implementing HRM for a multinational corporation(MNC)and its foreign subsidiaries.Three main approaches have been identified a globalized approach,a localized approach or a balanced approach.This study will apply this debate to the context of American multinational corporates with Chinese subsidiaries.This study will seek to understand for American multinational corporations with Chinese subsidiaries,what is the recommended human resource management approach,a globalized or localized approach?In order to conduct research,this study took three steps.First,existing literature on the topic of implementing international human resource management was examined.Existing literature notes the important role culture plays in human resource management.Second,a detailed evaluation of the differences between American and Chinese culture based on Hofstede’s(1980)Cultural Dimensions was performed.Finally,an analysis of interview and survey responses from 31 human resource management professionals was conducted.Among the HRM professionals,the average number of years spent working in human resources was approximately 20 years.Each individual represents an American MNC with a Chinese subsidiary from a variety of different industries.Results from the interviews and surveys found that rather than taking a siloed globalized or localized approach each different human resource policy and practice should be evaluated individually.Based on the human resource policy and practice,the HRM professionals felt differently if a globalized or localized approach should be taken.With this being said,this study finds a mixed approach to human resource management should be taken.HRM policies and practices such as hiring,recognition,and employee benefits it is recommended to be localized to the Chinese subsidiary.The company mission,payroll and screening of candidates it is recommended to follow a globalized approach.It is recommended a balance of both globalized and localized approaches should be taken when considering implementing HR technology systems such as a payroll portal,talent management and training.This research contributes to the study of international human resource management as it provides new knowledge and a preliminary information about human resource management in Chinese subsidiaries.This study provides a new and specific approach that American MNCs with Chinese subsidiaries can leverage to implement the human resource management function.The aim was to provide direct insight into the main HR functions such as employee benefits,talent management,learning and development,reward management,compensation and employee relations and which approach HRM professionals recommend companies take.Additionally,this study highlights the importance of considering the cultural differences and similarities between China and the United States and the impact these cultural considerations play on the business environment.Key cultural considerations that this study found important to a Chinese subsidiary’s culture and human resource management function are personal space,respect for hierarchy and employee’s pragmatic approach to work.
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