Imagine that you work in the human resources department of a small but growing c
ID: 446403 • Letter: I
Question
Imagine that you work in the human resources department of a small but growing company that runs a chain of clothing stores. The top managers believe that by next year, the company will be able to get financing to expand overseas, where consumer demand is growing. They are researching whether the next step should involved opening a few stores in Brazil or in China. Other members of your company are investigating the marketing and financial aspects of the expansion. You have been asked to learn more about the human resource issues the company would face in each country. Research and use your learning to identify HR issues that are likely to be important in each country. Write a one or two page summary of what you learned about each country, what your company should investigate further before moving into either country, and which of the two countries you would recommend from a human resources perspective.
Explanation / Answer
Being HR in growing company that runs a chain of clothing stores, as per the company’s interest we have are finding probability of best possible environment to do business either in Brazil or China. Being HR should be kept mindful of cultural differences and varying HR issues arising in the targeted country before trying to implement anything either it’s for opening stores or anything else. Needless to say that developing an inadequate talent strategy in a these countries could be one of a most expensive mistakes for a company. Not only in terms of money, but also in terms of real and potential talent losses.
If we see in Brazil’s perspective , Brazil's biggest problems is a shortage of qualified labor. Companies operating in Brazil are demanding more skilled workers than the labor market currently offers. It is also becoming increasingly difficult to retain talented workers with 5-10 years experience because they tend to switch companies in order to advance their careers and get higher pay.
Moreover in Brazil retention is also a major challenge as its economy is not doing excellent right now, but it is still strong. People have job opportunities, so a company has to offer more than good compensation or a good work environment to retain talent. HR are working hard to think about what else could be offered to young, talented people to engage them. HR are having discussions around value, purpose and meaning, and career expectations. Even it has been seen that Brazil’s labor laws are pressing issue as the labor code is very pro-employee and provides extensive protection to the employee at the expense of the employer. The cost of the employment relationship, the cost of hiring and firing, taxes are always issues of concern in it.
Where as in despite China's population companies are struggling to find and retain employees. China is strong in the masculinity culture as the economy has its orientation cantered on achievement and success. China seems like the perfect destination for expansion. But with lengthy bureaucratic procedures and an unfamiliar consumer environment awaiting those who try, having local advisors on hand to help navigate the complex market is crucial. It has been observed that HR remains a number one task for Chinese companies, with the demand for trained, professional labour still outstripping supply.
Administration, licensing, product approvals and many more laborious operating task can leave managerial desks flooded in paperwork. For many firms, overcoming the bureaucratic hassle is the biggest task to successfully breaking the Chinese market. It has been seen that Many Chinese companies are good in quality of their products and services hence are selling them abroad, which has increased competition as a result. Moreover consumers can, in some cases, give preference to native companies over those from abroad. Here in China government can also give preference to domestic firms, which makes disrupting the market rather difficult and Local distribution networks, buying habits of local consumers and regulatory requirements has made China a very difficult market to access.
If we see for growing companies with overseas aspirations to open stores in overseas, China seems like the perfect destination for expansion. But with lengthy bureaucratic procedures and an unfamiliar consumer environment awaiting those who try, having local advisors on hand to help navigate the complex market is crucial.
Being an HR one is eager to know how can an HR manage cultural variations when operating in a cross-cultural environment in order to increase their level of competitiveness amongst international firms. And HR should be more creative, flexible and innovative as when a firm goes international to open more stores at that movement culture plays an important role in influencing an external behaviour of employee within the firm and apart from this political situation also plays a key role in deciding the company’s future strategies to expand their business in international market by opening more stores.