Term Paper: United Airline Multinational Ventures

Pages: 9 (2792 words)  ·  Bibliography Sources: 0  ·  Level: Master's  ·  Topic: Business  ·  Buy This Paper


[. . .] In the past time of China, there was no human resource management in enterprise, three "iron" (fixed) practices replaced conventional human resource management. During the industry period, the government would manage all of the company's operation, and the managers were informed what to product and how to product by the government. In 1980s, after the Chinese opening-up and reforming policy has been introduced by Deng Xiaoping, the concept of human resource management has been developed because of the return of foreign companies.

Whereas, young people were usually assigned to jobs by the state, and the human resource management did not function well since it was purely administrative in nature. In this situation, the people who have been assigned job were considered as lifetime employment in China, which is also named "iron rice bowl." The iron position means that the managers can keep their job all of their lives and the payment are not related to performance. The iron wage have been given also indicates that managers need not be responsible for workers' salary and the company's benefits.

The managers are not motivated as there is no extra incentive if they work hard. Therefore, the managers' working efficiency would much lower than expected. They will commonly come later and leave earlier or even be absent to do private personal things in the working time; they will lose their technical skills and be difficult to train, after a period of time, most of the managers will strain their attitudes towards work and ultimately depreciate their personal value. Accordingly, when foreign multinationals start running business in China, they encounter difficulties in human resource management, and find that attracting qualified managerial staff in China is a challenge.

Culture differences

Besides of the aspect of human resource management, there are some other challenges that foreign multinational company met in Chinese market. Culture is also an important factor which has influenced the international operation of business in China. People from different countries always have different traditions and attitudes towards business. If foreigners want to manage business in China, they firstly need to understand the fundamentals of Chinese though and study of the Chinese business culture. In China, three philosophy traditions -- Confucianism, Taoism, and Buddhism had dominated Chinese people for thousands of years, people considered them as philosophy rather than religion. The Confucianism refers to human relationship, which oriented Chinese people's thinking and way of behavior; the main contribution is to ask people trust each other, avoid conflict and keep harmonious between each other. So when doing business negotiation with Chinese, foreigners may discover Chinese are a group of "gentlemen" with implicative and transigent. Taoism is a kind of doctrine which is famous for Yin Yang principle of dualism. The latter feng shui which is probably the most popular belief in Chinese businessman is derived from Yin Yang Eight Diagrams principle. It indicates that people's fortune are affected by their environment, and more specially, the position of building relative to its physical environment and the interior layout and arrangement of furniture can influence the events occur to the occupants of the building.

Many Chinese businessmen believe feng shui and consider it as a main strategy for business success. These philosophy traditions have been the roots of Chinese culture, which would play an important role in business behavior and decision-making. However, it is a big challenge for the foreigners because the unique business values and beliefs in China are and fundamentally different from other countries especially western countries. On the other hand, because of the deep influence by Confusion, people in China would rather believe people more than any other contracts during the business activities. So if foreign multinationals want to do business in Chinese market, they need to take a people oriented approach and establish a high level of trust relationship with Chinese partners, which is called "guanxi" in China.

There are a number of different challenges that multinational company operating the Chinese market. It could be culture differences, government limitations and human resource management problems. While attracting and retaining commitment managerial staff is considered as the main challenge that faced in China since the insatiable demand for a limited number of qualified managerial staff. Although multinational company has realized the human resource management problems in China and introduced a variety of employee retention strategies, it also faced some challenges in attracting and retaining qualified managerial staff. For example, the short of talent in China due to the unpractical education system and embarrassing output of university graduates; different recruitment and selection system between foreign companies and China; un-perfect salary incentives for Chinese staff; and high expatriate failure rate in China mainly because of culture shock.

In order to win the talent war, it is suggested that multinational company should firstly pay more attention on the recruitment process to ensure the employees' quality. On the other hand, the company can establish the internal training courses or schools to improve employees' abilities and skills. Additionally, the compensation and benefits mechanism should also be concerned as the rising labor cost and high turnover rates in China.

Entry strategy and operating procedures

Expansion of operation in the regional markets needs to be targeted where most effect can be felt. Unites airlines has realized remarkable growth by opting to operate in Local markets and slowly targeting global market with high completion. Given its unique culture of building it brand name through local demand loyalty, the firm stands a better chance to enter in the highly competitive market such as china and make meaningful strides towards growth. As opposed to taking little steps towards a capture of the market, the firm can capture a regional market in East Asia considering its early entry into the highly potentially competitive market. This will open avenues for substantial growth of its brand not only in China but also in the region.

The corporation will also combine the measure in entry into highly competitive market by diversifying its operational fleet to suit the market needs. Instead of having 10 flights in a day from the one airport, it can consolidate a number of its flight into one craft with a larger carrying capacity. This will bring an aspect of economies of scale a perspective that will reduce maintenance cost, fuel cost, terminal cost and labor costs. The demands in the china market can also be scheduled as far as cargo transport is concerned. This will lift the potential of corporation to introduce a culture that is in line with the Chinese's culture of efficiency. While considering the market exploration plans considerations for maintaining employee satisfaction, highly exceptional customer service and strict observance of the schedules is part of it. The deeply rooted value for employee should not be compromised since a value end aspect that complements the company's uniqueness in the industry.

Plans for expansion will not disregard focus on the important aspects that have opened pathways for such expansions. Considering the bridged need for corporation to remain firmly rooted on those aspects that have always worked, United Airlines needs to strategies expansions incorporating local demand and local flights. It should also be noted that other companies have capacity to adopt the value held by united airlines of capitalizing on local small demand that grows with increasing need of a growing economy as China. Capitalization in building customer loyalty will be based on customer needs articulation, employee commitment to eth values of the corporation and customer needs and innovations to meet customer needs. The need to come up with unique measure of making the employees feels highly valued will be emphasized to guarantee the company embraces success. [END OF PREVIEW]

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United Airline Multinational Ventures.  (2013, February 22).  Retrieved June 26, 2019, from https://www.essaytown.com/subjects/paper/united-airline-multinational-ventures/5643974

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"United Airline Multinational Ventures."  Essaytown.com.  February 22, 2013.  Accessed June 26, 2019.