Talent Management of Western MNCs in China: Balancing Global Integration and Local R esponsiveness

1. Talent Management of Western MNCs in China: Balancing Global Integration and Local Responsiveness Evi Hartmann, EddaFeisel, HolgerSchober, 2010

2. Introduction • Global integration vs. local responsiveness • Besides internal organizational factors, the transfer of HRM practices is also influenced by external contextual factors (Gomez & Sanchez, 2005). In order to transfer HRM practices from home country operations to China, both institutional factors and cultural differences have been purported to influence the adaption and responsiveness of HRM practices • Numerous Chinese cultural characteristics influence the implementation of HRM practices of MNCs in China. These include, for example, respect for elders and those positioned further up in hierarchies, the significance of ‘‘saving face’’ and harmony, and the importance of personal relationships (‘‘guanxi’’) between different members of the same group (Bjo‥ rkman & Lu, 1999; Gamble, 2003; Lockett, 1988; Wong & Slater, 2002)

3. In particular, the paper aims to answer the following two research questions • How do western MNCs in China identify, develop and retain talented employees? • Do institutional and/or cultural influences lead to the adaptation of talent management practice to the focal subsidiary in China?

4. Conceptual Background of Talent Management

5. Underlying Research Framework

6. Research Methodology:Case Study

7. Case Results • Identification of Chinese talent in western MNCs • Formalization-based mechanisms refer to the standardization and use of work policies and rules that are drawn up on a global basis and subsequently distributed to all subsidiaries as guidelines for their activities. • Internal talent standards (in usual) • Performance • Potential/competencies • commitment

8. Developmental activities and visibility of talented employees in China • Three of the case companies – Electrico, Technologico and Logistico – founded company-specific training institutes in China within the last ten years • Some rely on external training opportunities, the training is provided by local universities • Development process helps to enhance the visibility of internal talents and to increase the degree of localization • The contents of the training courses were not only adapted from the home country but also specifically designed for Chinese requirements • Training academies were considered as long-term investments in talent development and were only established by the larger companies in our sample • The use of people-based mechanisms helps to transfer tacit knowledge as well as to communicate important information during the establishment of such academies

9. Succession planning of talented employees in China • Some of the case companies noted that long-term planning and the early identification of potential incumbents is difficult due to the high mobility of Chinese managerial talent • The case companies mainly relied on information-based mechanisms to achieve integration. • Information-based mechanisms comprising tools that make information flows easier (Kim et al., 2003) were specifically used to enhance the global visibility of talented Chinese employees

10. Mentoring relationships in western MNCs • Described by the middle manager of Computerco: ‘‘We tried to implement mentoring to China; however, our impression was that Chinese employees do not open up to their mentors if they have a higher hierarchy.’’ • In general, the data showed that mentoring relationships are implemented informally rather than formally • Face-to-face communication is an important cultural element in China, respect for hierarchy was shown to hinder people-based integration and the internalization of HR practices.

11. Organizational culture at western MNCs • An organizational culture that supports the development of talented employees • Three case companies – Technologico, Electrico and Logistico – received strong top managerial support from their CEOs, who regularly participate in round table meetings with middle managers or trainees and visit top Chinese universities to meet students and encourage them to join the company • Furthermore, it could be observed that all seven case companies concentrated their efforts on building an organizational culture, which supports the development of personal relationships between the organization and employees • with the development of talented employees, all case companies relied solely on people-based mechanisms to create an organizational culture that supports talent management activities. Here, it was specifically pointed out that the Chinese culture and the preference for face-to-face interaction encourage the use of this integration mechanism