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Human resources management in China and the localization challenge

Author: Lasserre, Philippe ; Ching, Poy SengINSEAD Area: StrategyIn: Journal of Asian Business, vol. 13, no. 4, 1997 Language: EnglishDescription: p. 85-99.Type of document: INSEAD ArticleNote: Please ask the Library for this articleAbstract: There has been an increasing change of emphasis from expatriation to the localization of managers in China. Although expatriate managers serve as vital links of communication with the parent company and bring in certain expertise, the case for localization is too overwhelming. Localization enables foreign multinational companies to reduce bloated expatriate costs, offers better prospects for local managers, and help to retain them. It also makes sense for the local chinese to manage operations in China because they understand the local conditions better and consequently can manage local operations more effectively. However, faced with acute shortages of capable local managers, high staff turnover rates, and low levels of managerial skills in China, foreign multinational companies need to develop and master their competencies in recruiting, developing, and retaining their local managers. They must also be able to integrate all these competencies to achieve their goal of localization
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There has been an increasing change of emphasis from expatriation to the localization of managers in China. Although expatriate managers serve as vital links of communication with the parent company and bring in certain expertise, the case for localization is too overwhelming. Localization enables foreign multinational companies to reduce bloated expatriate costs, offers better prospects for local managers, and help to retain them. It also makes sense for the local chinese to manage operations in China because they understand the local conditions better and consequently can manage local operations more effectively. However, faced with acute shortages of capable local managers, high staff turnover rates, and low levels of managerial skills in China, foreign multinational companies need to develop and master their competencies in recruiting, developing, and retaining their local managers. They must also be able to integrate all these competencies to achieve their goal of localization

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