Overseas Chinese as Expatriate Managers in China: Is their Recruitment a Solution to Cross-cultural Management Problems for Multinationals Operating in China?

By Mona Chung and Wendy Smith.

Published by The Diversity Collection

Format Price
Article: Print $US10.00
Article: Electronic $US5.00

This paper examines the issue of diversity in Chinese identity and how it impacts on the operations of multinationals in China who recruit Overseas Chinese to handle cross-cultural issues. China’s rapid economic development and entry into the World Trade Organization in 2001 made her a formidable player in the global economy and direct foreign investment surged. Yet it is acknowledged that for the foreign investor in China, cross-cultural issues create difficulty at every level, from the interpersonal level relating to communication and negotiation, to the organizational level relating to decision making, human resource management practices, corporate legal institutions and liaison with government institutions. Western multinationals have considered the advantages of posting Overseas Chinese from Southeast Asian countries, Taiwan and Hong Kong to their China operations as a solution to cross-cultural management issues. But has this policy been successful? In terms of language expertise this would seem to be a good strategy, yet organizational case material contradicts this in reality. Overseas Chinese, while sharing some elements of Chinese culture with mainland Chinese, the Confucian heritage and other aspects such as language and diet, nevertheless have different world views and values and behave differently from mainland Chinese in areas critical to business management. As a survival strategy, Overseas Chinese have often developed dual identities which operate simultaneously. For political and historical reasons, many of them have had to adapt to the local culture of their country of citizenship or even hide their own ethnicity in order to survive. On the other hand, the mainland Chinese are different in that their behaviour has only had to be Chinese, but overlaid with this has been the experience of participating in a communist political environment for decades, which has left its mark on mainland Chinese culture. On the basis of their different historical experiences, in the current business environment in China, cultural confusion, difficulty and conflict may occur for the Overseas Chinese.
This paper focuses attention on the subtle cultural differences between the Overseas Chinese and mainland Chinese in an organizational context. This problem has yet to be researched in depth within international business and international management studies. It provides evidence that Overseas Chinese are not often favoured by the local Chinese. It gives insights on how to manage the local Chinese for foreign multinationals operating in China.

Keywords: Cross-Cultural Management, China, Overseas Chinese, Chinese Ethnic Diversity, Human Resource Management, International Business

International Journal of Diversity in Organizations, Communities and Nations, Volume 7, Issue 1, pp.279-292. Article: Print (Spiral Bound). Article: Electronic (PDF File; 736.637KB).

Dr. Mona Chung

Lecturer, Faculty of Law and Business, Deakin University, Melbourne, Victoria, Australia

Dr Mona Chung has an impressive career conducting cross-cultural businesses internationally. She has deep experience working with organisations establishing operations in China. She specialises in cross-cultural strategic planning, management and marketing practice for international organisations. Her major contribution in the area of foreign direct investment (FDI) into China is by identifying and overcoming cultural differences as the major obstacles in operations. Her PhD focused on this topic and provided cross-cultural management implications. She is frequent engaged as a guest speaker at public forums and tertiary institutions. She is an author of an extensive list of publications in the area of cross-cultural business studies. She teaches in international business, management and marketing.

Dr. Wendy Smith

Senior Lecturer, Faculty of Business and Economics, Monash University, Melbourne, Victoria, Australia

Wendy Smith is an Australian anthropologist who researches on cross-cultural management, Japanese management transfer, skill formation, and international business. She has lived and worked in Malaysia and Japan for 14 years. She speaks Japanese and Malay fluently. Currently, she teaches at the Department of Management, Monash University, Australia and is the director of the Centre for Malaysian Studies, Monash Asia Institute.

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