Employing local or expatriate managers in PRC? The policies and trend of localization of two electronics companies

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Employing local or expatriate managers in PRC? The policies and trend of localization of two electronics companies


Author: Lo, Sau-kam Iris
Title: Employing local or expatriate managers in PRC? The policies and trend of localization of two electronics companies
Degree: M.Sc.
Year: 1997
Subject: Executives -- Recruiting -- China -- Case studies
Hong Kong Polytechnic University -- Dissertations
Department: Multi-disciplinary Studies
Pages: iii, 88 leaves : ill. ; 30 cm
Language: English
InnoPac Record: http://library.polyu.edu.hk/record=b1420171
URI: http://theses.lib.polyu.edu.hk/handle/200/1160
Abstract: A case study method was adopted to explore informative data on the pattern of employment of expatriate and local managers in the Peoples Republic of China (PRC). Two cases are drawn from the electronics industry with the first case as a multinational corporation (MNC) in the telecom industry and the second case is a Hongkong-based manufacturer/distributor of famous audio products. The analysis focuses on three major areas: i. the policy of employing expatriate and local manager in their PRC investment ii. the reasons behind the adoption of such policy or pattern of localization, and iii. the trend of development / expected degree of localization of managerial staff of their subsidaries in PRC. The first case company (C1) in the study employed more expatriates in PRC than the second case company (C2). Determinants are identified which may help to explain the different policies adopted by the two case companies. These determinants are: i. age of development of the subsidiaries, ii. availability of quality local managers, iii. trust from the management of the parent company and iv. technology level of the industry concerned. Although C1 employed many expatriates in PRC, the management of the company were aware of the problems and disadvantages of an expatriate-dominant management team in PRC such as higher cost, communication problem, imbalance of power between local and expatriate staff, and social-cultural difference between local and host country. Both case companies agree that there are benefits and advantages for their company to employ local managers in PRC. The benefits and advantages are namely relatively more cost effective, development of local market, and better networking and relationship of local staff in host country. C2 has strategically done localization of management in PRC since it started its investment in PRC. For Cl, it is still at the early stage of development in PRC, but they are deemed to carry out localization as it was written as a planned development in their JV contract with the PRC government. In addition, both case companies review and expect that localization of managerial staff in PRC is a trend and will continue to be a trend in the future. Above all, contrary to the common understanding that localization of management in PRC is mostly cost-driven, the result in this study found that the management of both case companies truly valued the contribution of local managers to their operations in PRC.

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