Chinese Multinational Firms in Asia and Africa

Chinese Multinational Firms in Asia and Africa

Eth following study is built on findings from an empirical data collection and secondary information regarding the HRM approaches adopted by Chinese multinationals while operating in Africa and Asia. Some globalization approaches besides factors such as technology emphasize the cultural perspectives as the main elements driving influencing how they operate. There is a close connection between the government policy and the Multinational Companies (MNC); the government regulates the policies affecting them as they operate to fulfill the government agenda in those countries that they are established. This relationship influences the HRM practices by their MNCs. The Chinese government uses them as a strategic plan to achieve long-term objectives such as support in international organizations such as UN, raw materials, a market for its products, and the labor market for its citizens. The entry strategy is often through FDI and application for tenders, projects and so on and in return, aids are offered to the respective countries.

HRM is identified to vary based on the country where the MNC is established. For example, Huawei employs unique recruiting, training and remunerating strategies to favor its competition with other companies. Involvement in the social and economic life of its workers is applied as a platform to retain its employees who often move to advanced companies. Some MNC applies the dormitory strategy that involves the importation of workers from their countries. This method ensures easy management of the workers and works due to commitment, ability to work long hours, and cultural understanding. The establishment of the MNCs in the concerned states has resulted in various economic and political uprising, which are often silenced by threatening to quite those countries and withdraw financial aids. Thus, it can be noted that the government has great influence on the nature and operations of MNCs and influences the social, economic, and political developments in the respective countries.

Legal Environment

Through the establishment of legal frameworks such as industrial policies, the government influences the HRM structure adopted by the MNCs. For example, the protection of the IT sector by the Chinese government promoted inflow of international corporations to invest in its IT industry. It has a protective role to play to shield and regulate the influx of MNCs into its economy. For the case of African and Asian regions, the regulations are not properly structured,  which provides a bargaining advantage to the Chinese MNCs to enter and determine the kind of HRM implemented in those nations (Grosse, 2005; Cooke, 2014). In some African countries, Vietnam and Asia the governments cannot bargain for their workers or defend them when the MNCs do not meet their interest. If these governments had established stringent policies to regulate their operations, the terms and conditions would be set the well night before a deal is made. It is the only way of regulating aggressive MNCs in developing countries.

The Ethical Obligation to Develop Communities

MNCs have an ethical obligation to help the countries in which they are established. A sustainable business operation requires the establishment of a business structure on principles that will ensure environmental safety, stakeholder considerations and compliance with international laws (Sharma & Starik, 2004). The local communities form an important part of the stakeholders that should be considered by offering employment to such communities and promoting their welfare. The Chinese program does not favor these developments unless they have to gain from it; the policy is to offer no lone without direct control of the act intended. This has caused an influx of Chinese workers into host countries and mistreatment of local workers, bad debts and non-compliances to laws (Cooke, 2014). Such an operation is not based on good practice.

Human Resource Management and Industry

The HRM strategy varies with the nature of the industry involved. For instance, it has been noted how the Chinese government influences the HRM strategies employed by its MNC institutions; the government bids for contracts set the condition for loans such as a condition to import its workers and restraint on rebellious nations (Cooke, 2014). Besides these regulations, HRM practices vary between industries such as manufacturing, mining, and energy, and technological industries. The variation is based on the skill level required to complete the tasks. For manufacturing, mining, and energy industries where the labor force is based more on energy than skills, the workers are exploited by low wages and poor working conditions (Cooke, 2014). This pattern is advanced by the fact that labor is cheaply obtained and readily available. Therefore, the workers need no technical training, which makes the acquisition of new workers easier and their disposal inconsequential.

HRM in the technology sector is more complicated requiring a skilled workforce that is highly trained, well paid and maintained (Cooke, 2014). To maintain such an experienced workforce, the MNCs have to employ an upper hand strategy to compete with other technology companies. The market entry also varies with industry. Technological industries such as Huawei have experienced great challenges entering markets like India due to fear of exploitation. Besides, IT companies have to align their practices with the global standards given the competitive nature of the market and the influential players that determine the value chain. Such a high-level restriction has affected Huawei forcing it to consider its multinational HRM behaviors. Thus, the HRM strategy is influenced by the skills required which will determine labor costs, training, retention, and working conditions.


Cooke, F. L. (2014). Chinese multinational firms in Asia and Africa: Relationships with institutional actors and patterns of HRM practices. Human Resource Management, 53(6), 877-896.

Grosse, R. (Ed.). (2005). International business and government relations in the 21st century. Cambridge University Press.

Sharma, S., & Starik, M. (Eds.). (2004). Stakeholders, the environment and society. Edward Elgar Publishing.