SHR081-6 International and comparative Human resource management Assignment Sample
SHR081-6 International and comparative Human resource management Assignment Sample
Introduction
Marks & Spencer is a British-originated company that focuses on operating in the retail industry (Esoimeme, 2020). The company is mainly focused on selling products, such as women’s, and men’s clothing, children’s clothing, housewares, food items and gifts under various brands in Europe, the Middle East and Asia. The largest operation capabilities of M&S are considered to be in the United Kingdom, which consists of 1100 stores (Koreascience, 2018). Apart from that, the company has a global employee of 81,000 operating in 43 other territories around the globe from the year of 2017 to 2018 (Koreascience, 2018). However, China’s grocery market was noted to be growing estimated to be £609 billion from the end of 2011 to £950 billion by 2015 (Koreascience, 2018). Despite witnessing a potential market in China, M&S had significant issues based on cultural factors while operating in the Chinese market, which resulted in a significant failure at the end of its operational capabilities. Thus, the report is going to be focused on showcasing the different factors and aspects of the national business system. Hence, the report is going to be focused on analysing the case study based on the situation regarding the factors between the UK and China, that contributed to the failure of Marks & Spencer’s (M&S) operation.
National business systems
A National Commercial System (NBS) is a management system for a business organisation that focuses on the integration of legislation, equipment, and other amenities (Lundvall, 1999). It enables firm management to achieve specific goals and objectives based on the demands of organisational management in a certain market scenario. Hence, the NBS is mainly focused on two different aspects such as the behaviour of companies in accordance with economic rules and the second different contemporary competitive environments in the market. As a consequence, in order to be effective, NBS assists in the formulation of appropriate rules and regulations based on the demands of organisational management. NBS are primarily concerned with meeting customer expectations, lowering operating expenses and boosting savings, speeding up the execution process, and enhancing data flow throughout the organisation. It also focuses on providing assistance to the management in reference to the country, a specific system for corporate governance system of collective bargaining and a relationship with the stakeholders for better efficiency and performance in the market (Dekocker et al. 2012). Hence, it is mainly focused on maintaining a systematic framework in terms of the operations data being implemented by the management in a particular market environment.
Critically analyse the institutional factors between the UK and China that contributed to the failure of Marks and Spencer in China
Staffing training and development of expatriates
In terms of human resource management and issues that the company faced after shifting its business to China, were mostly linked with training and development, especially of expatriates. One of the significant challenges was the language barrier as learning Chinese is not quite easy and it requires a significant amount of training and development before expatriates could properly communicate in Chinese (Jin et al. 2018). One of the major reasons for learning Chinese is the necessity that these expatriates need to retrain Chinese employees once they have been sent off to China.
Apart from that, another HR issue that the organisation might have faced in terms of training and development of expatriates is the complexity of the language, which made it difficult to send a large number of expatriates to the Chinese market in the initial stages (Zhong et al. 2021). Chinese has been identified to be one of the most difficult languages across the world and without knowing proper Chinese; it became quite difficult for expatriates to communicate. This mostly led to miscommunication between different departments and has been identified to be the reason for internal conflicts (Zhang et al. 2022).
Role of expatriates of M&S in China
The reasons for identifying and selecting expatriates to move into the Chinese market were mostly due to the fact that it would have helped the company to ensure standardised operations in the Chinese market. Marks and Spencer started its business operations in the Chinese market in order to target mostly British customers who were living in China and understanding their preferences and needs could have been better done by British people themselves (Chao et al. 2019). Therefore, the role of expatriates in the markets of China was mostly linked with customer service and helping Chinese employees to adapt to British culture. Apart from that, training and development of localised staff in Marks and Spencer was another major role that was given to these individuals upon shifting to China. However, due to language barriers and differences in culture, this turned out to be a major issue for the Human Resources department as a result the company was not able to achieve its HR goals (Ulusemre and Fang, 2022). Moreover, contrary to strategies adopted by other companies operating in the markets of China M&S did not adopt a localisation strategy and instead focused on the standardisation of its production services, which was mostly enforced by expatriates. This was another role that was given to these individuals to ensure that the organisational culture, as well as the products, remained standardised, which ultimately led to the failure of the organisation’s operations in the Chinese market (Lauring et al. 2019). It can be implicated that the global approach of the company in the Chinese market leads to the downfall of the company and was not able to keep up against the local competition. There has also been a lack of divergent approaches in HR management, which contributed, to the company’s poor management
International performance management
Since globalization requires a significant level of knowledge and technology transfer from the organisation’s headquarters to its subsidiary, operating in a different market international performance management becomes a major requirement (Wang et al. 2022). In the case of Marks and Spencer, international performance management started to indicate that the company’s human Resource department was not able to fulfil its given duties and objectives. In this context, it can be stated that the international performance management that was undertaken by Marks and Spencer for its human resources in the markets of China was not up to the mark (Alzoubi et al. 2022). Moreover, the company was also not managing its human resources that were local to the Chinese market in a manner, which could help in identifying trends, and patterns that could be relevant to the market. The failure of human resource management to hire talented and skilled employees indicated a lack of an ethnocentric approach (Ren et al. 2020). The company was also struggling to keep up with the competition of the local organisations due to which the company was not able to higher local Chinese employees who could work in the favour of the organisation. This was another major blow to the organisation’s human resource management and soon turned out to be a major reason for the company’s failure in the markets in China.
Labour unions and international labour organizations
Labour unions and the International Labour Organisation have set forward various regulations and guidelines with global companies need to follow in order to ensure that they are offering a better working environment to the employees working in the company (Fan et al. 2022). In this context, it can be stated and that the issues linked with labour unions within Marks and Spencer in the Chinese market could have been the reason for the company’s downfall and lack of human resource performance. The productivity of the organisation could not match up against the local competitors, which indicates a lower level of workforce productivity and motivation among the employees working in the organisation’s Chinese subsidiary (Silbiger et al. 2021). Apart from that, it can also be implicated that the organisation was unable to fulfil the demands of the local Chinese employees due to which the company was not regarded as an effective employer in the Chinese market. Furthermore, the standards that have been implemented by the International Labour Organisation also require global companies to offer a significant level of consideration to local employees which Marks and Spencer could not fulfil (Chung and Celadon, 2019). This attend out to be a major disadvantage for the organisation against its local competitors and the company was not able to manage the overhead costs and the growing operational costs that led to losses and the company had to exit the market.
Cross border management
Cross-border management is another essential step that global companies need to manage monitor and evaluate from time to time in order to ensure that the subsidiaries operating in different markets across the world are achieving their giving goals and objectives (Khan et al. 2019). In this case, it can be implicated that Marks and Spencer was significantly unable to achieve effective cross-border management, which would have helped the organisation to achieve a higher level of productivity from its human resources. Furthermore, the organisation was also unable to higher local talent, which could have helped the company’s need for effective employees who could replace the expatriates who were clearly not performing up to the company’s standard.
The political environment in China
The political environment in China is quite bureaucratic compared to Western politics. As per reports, the Chinese government has often been criticized for adopting strategies and policies that exert pressure on foreign companies trying to operate in the Chinese market (Reuters, 2022). Apart from that, it has also been seen that China’s foreign ministry has often soon lacked transparency in terms of implementing various policies that govern foreign companies in the markets of China (Zhu and Österle, 2019). There are aspects linked with political decision-making that not only make it complicated for foreign companies to operate in the Chinese market but also exact a lot of pressure (Reuters, 2022). Adding to that, it has also behind identified that one of the major reasons which attract companies to the Chinese market is the availability of cheap labour however to avail the such facility in China companies have to go strings in monitoring under the Chinese government. Shipping yards have also been found to be riddled with thefts, which have recently crossed $600 billion and the Chinese government has not taken any specific steps to ensure that foreign goods that are imported and exported from Chinese ports are safeguarded (The Conversation, 2020).
Economic factors
If economic conditions and factors are taken into consideration for analysing the failure of M&S in the Chinese market then it can be stated that the year in which the organisation entered the Chinese market has been a disaster for the global economy. 2008 was also the year of the global financial crisis and severe credit crunch; thus, entering a foreign market during this time period can be implicated as a risky move (Ahmed, 2016). In a matter of 4 years, M&S had to leave the Chinese market and a lot of economic aspects also led to the exit of M&S from the Chinese market.
Technical environment of the market
If the technology environment is taken into the constitution, then it can be stated at that the time when M&S exited the markets China’s digital marketing was still in its nascent stages. Moreover, social media marketing was also not as popular as it is today and due to the absence of various social media platforms that dominate the global market in China M&S could not market itself as a popular fashion retail brand in the Chinese market (Kostka, 2019). This indicates a lack of brand identity and insufficient strategies that the company could you to lies to create awareness among the target customers in the Chinese market. Apart from that, as already mentioned above the lack of online presence as well as any local partner in the Chinese market created special over the marketing department, which could not reach out to the target customers in a manner, which could influence the decision-making process of customers towards the products offered by M&S. It has also been in critically acclaimed that the market position in strategies adopted by M&S was not up to the mark and did not match that of the domestic brands. This is one of the reasons why the lack of using digital marketing and online presence affected M&S and its operations in the Chinese market (Retail in Asia, 2016).
Critically analyse the cultural factors between the United Kingdom and China that contributed to the failure of M&S in China
Cultural gap
The major reason behind the downfall and failure of M&S in the Chinese market was the lack of understanding regarding the organsational culture of among chinese nationals. One of the major primary issues considered to be the most significant factor behind the overall failure of M&S in the Chinese market is their adoption of similar business models in foreign markets (Koreascience, 2018).
It is important for other international brands to alter their operation as per the requirements of the Chinese cultural factors and the requirements of the customers. M&S was following the exact same style and method as compared to the British market and did not alter the products and services as per the requirements of the Asian body (Koreascience, 2018). Based on the operations of China, it was noted that Mark and Spencer were not focused on altering their products and services as per the requirements of the Chinese population (Koreascience, 2018). Hence, there was not even a single initiative by the management of M&S based on the Chinese situation regarding products and services. As per the problems that arise within the operation style of M&S, it was noted that the management was only labelling products as per the European concept as the sizes mentioned in the clothing were 6, 8, 10 and 12 (Koreascience, 2018). Whereas, the Chinese population was not habituated to this particular levelling system based on size preference. The Chinese population was more into S, M, L and XL and it resulted in increasing confusion regarding purchase directions because of the unfamiliar size labelling the clothing category based on the portfolio showcased by the brand in the showrooms (Koreascience, 2018).
Hofstede’s model
The framework of Hofstede’s cultural dimension theory is focused on showcasing the differences in culture across countries and their impact on business operations (Gallego-Álvarez and Pucheta-Martínez, 2021). Based on the case of M&S’s operational failure in China, it is going to showcase the different cultural differences that were the major issue and reference power, distance, individualism, masculinity, uncertainty advance, long-term orientation and indulgence.
Figure 1: Cultural differences between the UK and China
(Source: Hofstede-insights, 2023)
In reference to the factor of power distance, it has been considered that there has been a significant difference in the bureaucracy regarding the work culture of both countries. On the basis of China, it has been found that the power distance index is considered to be signed on the higher side as compared to the UK, which is noted to be at 35 and China at 80 (Hofstede-insights, 2023). Hence, there has been a huge gap in the power distance index between both countries. The factor of individualism in China is considered to be at 20, which is significantly on the lower side (Hofstede-insights, 2023). On the other hand, individualism in the UK is considered to be at the index of 89 and a higher level (Hofstede-insights, 2023). Therefore, there are significant similarities in workplace structure and capabilities of individual workers within the workplace in terms of the effectiveness of their personal performance. Whereas, the masculinity index of both countries is considered to be at a similar level, which is 66 (Hofstede-insights, 2023). This can be considered the only factor that could be relevant to the work structure of the UK with China. In terms of uncertainty avoidance, there has not been a major gap between the countries. For example, China is considered to be at 30 as compared to the UK, which has an index rate of 35 (Hofstede-insights, 2023). Thereby, both countries had a similar avoidance level of individuals based on their capabilities within the workplace. As per the factor of orientation, it has been noted that the UK has been focused on the long-term orientation aspect as they have an index rate of 87 as compared to China, having a shorter-term orientation index of 51 (Hofstede-insights, 2023). On the basis of indulgence, it has been noted that China has an index rate of 24 as compared to the UK with a higher index rate of 69 (Hofstede-insights, 2023). Based on the oral findings, it can be stated that there have been major cultural differences among the individuals in China as compared to the individuals working in the UK. M&S was noted to apply the same work style structure in the case of China as they intend to follow in the UK.
Schein cultural model
Edgar Schein’s cultural model focuses on the basic assumptions regarding three different factors that could be visible in terms of organisational culture (Chung and Celadon, 2019). Based on the model, it has been noted that it is mainly focused on three major aspects of cultural dimension on the basis of organisational culture. The three major types of cultural aspects are artefacts, values and basic assumptions.
Figure 2: Schein’s Model of Organizational Culture
(Source: As influenced by Managementstudyhq, 2023)
In terms of artefacts, it includes several aspects that have an inference over the cultural aspect through the help of architecture, interior arrangements, physical space, and location based on the cultural beliefs of a particular organisational workforce (Roberson and Crumpton, 2022). In the case of M&S’s operation in China, it has been found that the management has focused on altering their locations with specific ideologies that would help the brand to outstand in the market of China (Alexander and Bardey, 2020). This particular aspect also includes language that gives away culture through the modes of speaking style, types of slogans, sound and expression. Hence, it was not possible to be a prominent aspect in terms of the failure of M&S in China. The second aspect of the framework is mainly focused on the values that organisational management shares in internationalisation based on cultural aspects (Verbeke et al. 2020). In the case of M&S, the management has been focused on adopting a similar strategy as compared to the UK policies (Esoimeme, 2020).
This has resulted in the entire management facing difficulties in providing superior services to the customers, as there has been a considerable gap between cultures between the British population and the Chinese population. Due to the UK work style structure of the Chinese operations, the workforce within the Chinese workplace was facing significant difficulties in altering duties and providing products as per the requirements of the Chinese population (Lu et al. 2020)
This particular aspect focuses on the assumptions evolving among the members and the management in order to provide superior service to the customers and focus on the alteration needed in terms of cultural differences. Hence, it can be considered that it is the most important aspect that has been neglected by the management of M&S while operating in the Chinese market (Le Thuy and Oe, 2020). Due to the negation of this particular scenario, M&S has been struggling to provide customers with basic needs and requirements. so irrelevant as a mission of labelling style, the Chinese customers were facing significant challenges in making purchase decisions based on the required size products (Shahin et al. 2020). Based on the above findings, it can be stated that the major aspect that has been the reason behind the failure of M&S’s operations in the Chinese territories is the negligence of basic assumptions regarding customer demands and requirements in the Chinese market.
Conclusion
According to the findings of the preceding study, China might be regarded as a promising market for the retail business. Brands participating in this market focus on changing their CSR policies based on cultural characteristics in order to improve overall performance in the market situation. However, it could be concluded that M&S’s general failure in the Chinese market is attributable to their incompatible cultural and work structures. As previously stated in the above report, clients in the Chinese market were having difficulty making purchasing decisions for certain items and services since the labels were made in the UK manner. Additionally, the impact of the institutional factors has also shown how institutional factors led to the exit of M&S in China. Based on the overall findings, it has been determined that the primary cause for M&S’s failure is the company’s inappropriate business system that was adapted for the Chinese market. As previously said, the firm adopted the UK work structure and product range, resulting in the entire organisation confronting a big issue of customer satisfaction in the Chinese market.
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