A brief analysis of the talent localization strategy of multinational corporations (turn)

The 21st century is an era of economic globalization, and transnational operation will become a common mode of operation for enterprises in various countries. Cross－culture problems must be faced and dealt with in the transnational operation of enterprises. How to face cross-culture and deal with cultural conflicts is one of the important factors that affect the management effect and success or failure of multinational enterprises. One of the most effective ways to solve cultural conflicts is the localization of management personnel, that is, the management personnel of multinational companies in foreign subsidiaries, especially middle and senior managers and key technicians, are mainly local personnel in the host country. In the last decade or two, although each country has its own characteristics in the personnel strategy of transnational operation, a prominent phenomenon is that the localization strategy of talents has an increasing influence among the personnel strategies that multinational companies can choose, such as the localization of talents and the internationalization of talents. A survey by foreign scholars shows that 43 of the 44 American multinational companies employ local people as senior managers.

Since the reform and opening-up in China in 1979, the agreed foreign capital has reached 471 billion US dollars, and the actually introduced foreign capital has reached 171 billion US dollars. More than 281,111 foreign-invested enterprises have been approved, with 1.4 million enterprises actually operating and 1.7 million employees. Among the top 511 multinational companies in the world, nearly 211 have invested in China. (1) In order to adapt to the unique business environment in China, multinational companies have used localization business strategy to varying degrees, and localization of talents is one of its main characteristics. The localization of talents is of great significance to the operation of multinational companies in China. China people are employed to manage the production and operation business. They are well versed in China's cultural traditions and their behaviors and ways of thinking under their influence, and can communicate and cooperate with their subordinates well to carry out effective management. At the same time, these Chinese personnel often receive more western education, have a deep understanding of western behavior and management methods, and can better understand and implement the management ideas of foreign bosses. Therefore, the localization of managers plays an important role in resolving cultural conflicts and promoting effective cooperation. The general manager of a Sino-American joint venture pointed out that "localization of managers is a trend in foreign-funded enterprises, which is increasingly proved to be effective and can reduce costs."

Of course, localized operation also has obvious weaknesses. In terms of management communication, how to understand the strategy of the headquarters and implement it locally, the managers sent from abroad at the beginning have an advantage in this respect and can better understand the intention of the headquarters. This is also the reason why multinational companies that first entered China started to use foreign managers. There are obvious differences between westerners and orientals in management culture. Westerners don't care about people when dealing with problems, no matter what is right in advance, then talk about people. Something is wrong, no matter who you are, just deal with it. China people, on the other hand, subconsciously look at who did it first when faced with a problem. If it is done by some specific people, even if there is something wrong, it will affect the handling of things because of the respect. China people's method of discussing things according to people can't adapt to the institutionalized management of multinational companies. Institutionalized management attaches great importance to documentation and data. In the vast majority of multinational companies, if they want to do something, they must do it very rigorously. They clearly describe the ins and outs of the matter and the description of the project in documents, and rely on documents and data in everything, which is very different from enterprises in China.

the management of an enterprise is essentially the competition of the market, which is essentially the competition of products, the competition of products is essentially the competition of science and technology, and the competition of science and technology is essentially the competition of talents. Therefore, the competition between enterprises is ultimately the competition of talents. With the economic internationalization, enterprises are increasingly engaged in transnational operations and participating in international economic competition, the amount of materialized capital owned by an enterprise is no longer the key factor to determine the outcome, and talents have become the key to the success or failure of an enterprise. It can be seen that the localization of management talents is a prerequisite for the success of foreign investors to invest and run enterprises in China. At the same time, because China culture has its special origin and humanistic background, how to adapt to China culture as soon as possible is another problem for human resources managers and general managers of multinational companies. Since China's reform and opening up, the empirical materials of personnel policies of foreign multinational companies investing in China have also reflected this distinctive feature.

Sanyo Electric (Shekou) Co., Ltd. is the earliest wholly-owned production enterprise established by Japanese Sanyo Group in China, and all its products are exported. At present, there are about 4,511 local employees in China, including about 114 middle and senior management cadres and 311 grass-roots supervisors. Most of these management cadres are trained and promoted from the workers. Beijing Sitong Matsushita Electric Co., Ltd. regularly sends China employees to participate in overseas training every year. After training, many Chinese employees become the technical backbone and management cadres of the company. ②

Mr. Su Jingshi, the Asia-Pacific Vice President of Yum! Brands, which manages more than 3,111 KFC, Pizza Hut and korbel in the world, wrote in an open letter to all employees of China Company: "We will accelerate the localization process of management talents and strive to find suitable talents to join the company in China in the next five years." ③

One of the guiding principles that Motorola follows in every investment in China is the principle of "localization of management". An important part of management localization is employee localization. Localization of employees means that multinational companies train local employees in a transnational environment, so that they have the ability and knowledge of a certain position and can be equally competitive with the same positions in other parts of the world. The company gives employees a lot of room for development and makes them full of hope for the future. Training a group of excellent reserve managers for the company is most beneficial to the company's own development.

Undoubtedly, many famous companies in China have made great efforts in using local talents in China, which has played a positive role in improving the quality of human resources in China. Talents are not born. To realize the localization of management, we need to actively cultivate outstanding talents and dare to let them develop, manufacture and sell products. Foreign-funded enterprises attach great importance to employee training, and think that training is extremely important to improve the competitiveness of enterprises and the long-term development of the company. Through training, employees' job skills will be greatly improved, and knowledge of corporate culture will be instilled in employees, and efforts will be made to create senior staff who meet the requirements of the company and a stable and high-quality team. Motorola set up Motorola schools in Beijing and Tianjin to train employees on a large scale. At the same time, it also sent outstanding employees to the headquarters of the United States for long-term or short-term training.

The training policies of foreign companies are very attractive to China employees. It shows people that getting such training opportunities will undoubtedly benefit their career and lay a good foundation for future development. Many people are full of praise for the training of foreign companies and hope to have such training opportunities.

foreign-funded enterprises have spared no expense in training. China Training Planning Department of the famous American General Electric Company invested $911 million in training funds in 1996 alone. In contrast, Chinese enterprises don't know enough about the importance of training. Many enterprises don't pay attention to the training of employees, the input of training, and the tracking and feedback of training effect.

The goal of talent localization in multinational corporations is to maximize the global operating profit, but it shows many advantages over other personnel strategies in practice, which are as follows:

First, improve the international image of enterprises and enhance the trust of the countries where subsidiaries are located.

if a large number of people from the host country enter the local subsidiaries of multinational companies to take up management jobs, they will generally take their own national feelings, which will definitely curb the multinational companies from carrying out any behavior that harms the interests of the host country. At the same time, the practice of multinational companies to abandon national prejudice will also win the trust of the host government and people. The high transparency of the company's operation will also establish its own international image.

second, avoid management losses caused by cultural differences.

David. A. Lex thinks: "Almost all the failures of multinational companies are caused by ignoring cultural differences." Some people think that the proportion of failure due to these reasons is 25%-41%. The localization strategy of talents can overcome this deficiency to a great extent. In addition, the implementation of talent localization strategy can reduce operating costs and make multinational companies profit obviously. Under normal circumstances, managers sent abroad must invest a lot of money to carry out comprehensive and in-depth training on relevant knowledge for a long time. At the same time, these expatriates also enjoy high allowances and subsidies, round-trip travel expenses between their home countries and host countries, etc. Direct employment of personnel from the country where the subsidiary is located can, on the one hand, avoid the above expenses, on the other hand, make full use of the advantages of low wages in the country where it is located, and attract high-quality talents with wages far lower than those of the home company but significantly higher than those of the country where it is located. Furthermore, due to the adoption of talent localization strategy, cultural barriers have been eliminated to the greatest extent, and the company's ability to deal with the host government has been enhanced.

thirdly, it ensures the relative stability of the company's management personnel to a certain extent.

When people from the home country go to work in a foreign country, their ideological instability caused by cultural differences and family members' inadaptability sometimes causes managers to give up their management duties halfway in the host country; Managers in their home countries often encounter opportunities for cross-border promotion, which will affect the stability of managers. Recruiting local managers in the host country will reduce this negative impact.

for multinational companies, the talent localization strategy obviously brings more benefits than the above points. However, the talent localization strategy, like other strategies, has advantages and disadvantages, and its advantages and disadvantages coexist. Theoretically speaking, in the personnel strategy of multinational companies, the internationalization strategy of talents should be the most effective. Because it does not consider the nationality of managers, but only from the perspective of ability, it is more in line with the growing global strategic needs to rationally allocate and use human resources on a global scale. However, in practice, because many countries where subsidiaries are located require to employ local personnel as managers and realize this requirement through state intervention, the strategy of talent localization has a series of insurmountable weaknesses. First, in order to internationalize managers, multinational enterprises must disperse recruitment in a large geographical area, train employees in language and culture, and transfer managers and their families in different countries, which may make the cost of implementing this strategy higher. Second, this strategy requires multinational companies to implement highly centralized control in human resource management, thus limiting the autonomy of regional managers in employing people.

The localization strategy of multinational corporations has obvious influence on China: on the one hand, they have trained a large number of high-quality talents for China, and in a sense, they have also reserved management talents for the future development of China. Managers employed by multinational companies in China have more opportunities to get in touch with foreign advanced science and technology and management experience, and become familiar with the operating mechanism of market economy. The mobility of these new enterprise managers and technicians in China will certainly promote the spread of international advanced management experience and technology in China, thus accelerating the process of China's economic integration into the world economy. On the other hand, the talent localization strategy of multinational corporations makes the remuneration gap between Chinese senior managers and technical backbones of some multinational corporations and ordinary workers very large. It is quite common that the salary of department managers of Chinese personnel reaches four to seven times that of workers. The salary of Chinese representatives in some joint ventures is more than ten times that of directors of similar state-owned enterprises. At the same time, these multinational enterprises also implement housing concessions for higher vocational personnel. As a result of this compensation policy adopted by multinational corporations, a large number of talents in state-owned enterprises are lost, and high flyers, a college that the state spends a lot of resources to train, is given priority employment by multinational corporations, which brings psychological imbalance to state-owned enterprise cadres at the same rank and affects their work enthusiasm. Some senior Chinese employees even completely sided with the interests of foreign businessmen, even connived at foreign businessmen harming national interests, and even made suggestions for foreign businessmen to make huge profits.

Note:

1 Globalization trend and human resources development in China. Beijing Talent Market News. March 9, 1998

2 Localization of talent management. China Human Resources Development. 1998 No.18

3 China MBA is promising. China Human Resources Development, No.12, 1998

4 Some information about the labor relations of foreign multinational companies investing in China. Contemporary trend of thought February 29, 1998