The HRM Strategies of Korean Companies in China: Localization of Management

Abstract

Since the 1980s, in the wake of the Chinese leaders’ open door policy, investment in China by foreign manufacturing companies proliferated. To date, however, much research attention has been focussed on high-profile manufacturers from Western countries in major Chinese cities and the plethora of investors from Hong Kong and Taiwan in China’s south-eastern seaboard. In contrast, the focus in this chapter is on companies from a late industrializer, the Republic of Korea, having undergone a severe economic crisis, and in the decades of the 1960s and 1970s known as a low-wage economy. Undoubtedly, one of the current motivations for Korean industries in China has been the presence of cheap labor relative to that in other Asean countries. Nevertheless it will be argued in this chapter that such Korean investment in China involves wider issues and incentives, without consideration of which it is impossible for companies to develop long-term strategies crucial for profitability stemming from the successful penetration of Chinese and foreign markets.