Team B Course Project

Team B Course Project RUNNING HEAD: Team B Wireless
Team B- Course Project HR 584 Managing International Human Resources October 21, 2012
Team B Course Project
Abstract
Team B Wireless is a U.S. company that is looking to expand its business overseas. The organization has narrowed the choices between Beijing, China and Bangalore, Karnataka in India. This paper will compare and contrast each citys labor laws, demographics, language culture, economic stability, HR policies and practices, and HR trends to determine which location will be the most suitable for TBW to set up its operations. Recommendations will be given on the best course of action to be taken determined by the research of these two locations.
Table of Contents
Abstract ......................................................................................................................................................... 2 Contribution Key .......................................................................................................................................... 4 Introduction ............................................................................................................................................... 5 India - Bangalore, Karnataka .................................................................................................................... 6 Labor Laws ........................................................................................................................................... 6 Demographics ....................................................................................................................................... 8 Culture................................................................................................................................................... 8 Language ............................................................................................................................................... 9 Economic Stability .............................................................................................................................. 10 HRM Policies and Practices ................................................................................................................ 10 HR Trends ........................................................................................................................................... 11 China Beijing, China ............................................................................................................................ 12 Labor Laws ......................................................................................................................................... 12 Demographics ..................................................................................................................................... 13 Culture................................................................................................................................................. 14 Language ............................................................................................................................................. 14 Economic Stability .............................................................................................................................. 15 HRM Policies and Practices ................................................................................................................ 16 HR Trends ........................................................................................................................................... 16 Review of HR Factors ............................................................................................................................. 17 Recommendations ................................................................................................................................... 21 Works Cited ................................................................................................................................................ 24
Contribution Key
Lori Brooks contributions to the project consists of the Introduction, small portion of the India and China, HR Review, and the Recommendation sections Latoya Browns contribution to the project consists of the section on China. Sandra Casauays contributions to the project consist of the section on India and the Abstract.
Ramon Corderos contributions to the project are a portion of the Recommendations section and small
portion of the Abstract.
Introduction
In the last 20 years, worldwide mobile phone subscriptions grew from 12.4 million to over 4.6 billion. According to Reuters.com "With or without a recession, millions of people in India, China, and Nigeria, and other emerging markets will seek out mobile phones, according to the International Telecommunication Union (ITU). Team B Wireless (TBW) is a well-known U.S. cell phone manufacturing company that has a great reputation and has decided to expand overseas. Currently, TBW is a leader in the industry with approximately 5,000 employees and focused on delivering a quality cell phone product for a reasonable price for its customers. To date, TBWs main competition has only been with similar U.S. cell phone manufacturers. TBWs new mission is to expand their product internationally. Additionally, due to the large market in cell phone market, TBW must do extensive research on identifying the direct competition and where the best location to expand operations. Expanding the business overseas would help TBW grow and receive greater profits by reducing manufacturing costs. For this reason, TBW is considering expanding into either China or India. There will have to be extensive research and a HR analysis conducted to determine which of these two countries will be the ideal location to open a manufacturing plant and call center. However, TBW will have to keep in mind that because they are doing well in the United States, does not guarantee success in either of these two countries. TBW has projected both short-term and long-term goals for the next five to ten years. In the next few years, TBW plans to have a successful second location within either India or China with some of the best talent in the cell phone manufacturing industry. Additionally, TBW projects that they will significantly see a profit financially that is steadily upwards. As a result of this success, TBW projects growth and expansion globally.
In order to determine in which location would be more favorable for the expansion requires a comparative HR analysis for each city. This analysis will demonstrate not only the differences and similarities, but the pros and cons as it relates to laws, regulations, mandated compliance issues, demographics, culture, currency, economic and political stability, language, labor relations, union influence, human resources policies and practices, human resource trends, and likely effects of the human resource function. This analysis will also include future trends to anticipate in human resource policies and practices. Finally, the comparative analysis will be used to identify which location will be the ideal for TBWs expansion and to formulate recommendations.
India - Bangalore, Karnataka

Bangalore, also known as Bengaluru, is the capital of Karnataka state in India. It was founded in the beginning of the sixteenth century. Bangalore has a population of 9.6 million, which ranks in the third largest in India. The city is known by its many nicknames, namely the Silicon Valley of India, City of Gardens, and Pub Capital of India. The city is one of the fastest growing metropolitan areas in the nation. Bangalore saw a boom in information technology in 2000. Presently, the city has the highest concentration of IT companies in India. Bangalore has become a major player for many types of businesses, including software companies, aerospace engineering and research institutes, telecommunications companies, and defense organizations (Bangalore City Map, 2012). Labor Laws India has labor laws which address various work-related issues such as working conditions, compensation, and dispute resolution, to name a few. Both the central and state
governments have jurisdiction over labor laws and therefore both bodies enact laws on issues concerning the workplace (Embassy of India, Washington, D.C.). The main labor laws in India are: Workmens Compensation Act 1923 compensation awarded to an employee if he or she is injured on the job. In case of death, dependents will receive compensation. Industrial Employment (Standing orders) Act 1946 requires employers in industrial organizations to provide full disclosure with regard to classification of workmen, holidays, shifts, payment of wages, leaves, and terminations. Industrial Disputes Act 1947 ensures investigation and settlement of industrial disputes are conducted and lists what actions are necessary before the termination or layoff of an employee who has been working for the same company for more than a year. Minimum Wages Act 1948 prescribed minimum wage for all employees based on the schedule prescribed by Central and State Governments. Payment of Wages Act 1948 time limits as to distribution of wages and outlines deductions authorized by law. Employees Provident Fund and Miscellaneous Provisions Act 1952 ensures financial stability of employees by providing programs like 401(k) and other savings plans where the employee can set aside a certain percentage of their paychecks to prepare for retirement. Maternity Benefit Act 1961 provides benefits to women before and after childbirth in certain establishments. Payment of Bonuses Act 1965 payment of bonuses based on profits or productivity in certain establishments employing 20 or more people.
Payment of Gratuity Act 1972 gratuity is payable after retirement in all organizations with 10 or more employees (Labor Laws, 2012).
Demographics Bangalores population in 2011 was about 9.6 million, of which approximate 5.0 million are male and 4.6 million are female. There was about a 47 percent increase in population since 2001. The density for Bangalore is 4,378 per square kilometer. The citys literacy rate in 2011 was over 88 percent compared to about 83 percent in 2001. The total literate was 7.6 million, of which 4.1 are male and 3.5 million are female. Out of the total population in Bangalore, approximately 91 percent live in urban areas, with an estimated total of 8.7 million. The total population living in rural areas was 869,000 as of 2011 (Bangalore (Bengaluru) District, 2011). Culture The people from India pride themselves of having a diverse culture. Their values and beliefs are deeply rooted within their mind, heart, and soul. The Indian people remain unchanged despite adopting means of modern living and improved lifestyles (Culture of India, 2009). Indians think it is important to take care and serve their guests. Indian people treat their guest as if they are part of the family. Guests are always fed well and are looked after. Respect for elders is important in the Indian culture. In fact, the belief is that elders are the motivating force for any family and because of this the love and respect for elders comes from within and is not artificial (Culture of India, 2009). Respect is prominent in the workplace as well. Indians look at respect as a duty and therefore is the driving force in every relationship. In other countries, the relationship between the boss and the employee is similar to a master and a slave. This relationship is monetary-
based; however the Indian culture boss-employee relationship is more homely relationship (Culture of India, 2009). Indians are typically considered to be helpful and thoughtful. In early childhood, they are taught to help others who are in need or are in distress. Additionally, Indians believe it is important to spread joy and be sympathetic when someone is sad or in pain (Culture of India, 2009). Another aspect of the Indian culture is the caste system, which is a process of having people in pre-determined social hierarchies. Indias caste system has four main classes based on personality, occupation, and birth. They are: Brahmin consists of those engaged in scriptural education and teaching. Kshatriya consists of all forms of public service, whether it is administration, maintenance of law and order, or defense.
Vaishya consists of engaging in commercial business activity. Shudra consists of the work performed by the semi-skilled and unskilled laborers.
Language The native language spoken in Bangalore is Kannad. However, there are other regional languages spoken too, including English. While the majority of the population converse in Kannad, a significant number of people in Bangalore speak English. One of the primary reasons for the predominance of English is that India was a British colony. Therefore, the government and education institutions English was the main language. For this reason, English language has been anchored into the Indian culture. Indias educational institutions are exemplary in the deliverance of high-standard education in many areas of study, which help prepare students for the highly competitive
Team B Course Project 10
working environment (Bangalore Education.net). Additionally, India has language schools that teach English, one of the largest is located in Bangalore and is the largest language training institute allowing prospective employees to attend classes to sharpen their English communication skills. Economic Stability India prides itself as the tenth largest economy in the world. In terms of purchasing power parity, it is the fourth largest. Under the automatic route (requirement of investors to notify the Reserve Bank of India within 30 days of receipt of inward remittances), India allows 100 percent of Foreign Direct Investment (FDI) in almost all sectors; only a few require prior approval from the Government (Doing Business in India, 2012). The GDP of India in terms of purchasing power parity in approximately 4.5 trillion dollars. With the current exchange rate, the GDP is valued at 1.8 trillion dollars. The end of 2011 put Indias Real Growth Rate at approximately 8 percent, ranking it fifteenth in the world. The countrys per capita GDP is $3,700, an increase from $3,500 in 2010 and $3,200 in 2009 (India Economy, 2012). HRM Policies and Practices The economic crisis that affected countries worldwide surprisingly did not affect India too badly. In fact, 2008 saw a salary increase among Indian workers of about 15 percent. Only 20 percent out of 150 companies surveyed participated in a hiring freeze. Furthermore, 57 percent adopted practices to increase productivity while balancing the effects of inflation and lower HR budgets. Additionally, 31 percent redirected manpower towards improved efficiency. Many companies linked performance with their employees salary increases (Corporate Bureau, 2008).
HR Trends From 2010, hiring has been up in Bangalore. HR personnel are relying on current employees to refer friends and family members, in addition to career sites and other sources. The referrals allow HR to receive more applications from which to choose the best possible candidate(s). Indian companies see the value of referrals and have recently started compensating employees for the referrals they make that become successful hires (Employee Referrals: The Best Source of Quality Hire, 2012). With Bangalore being dubbed as the Silicon Valley of India, the city is attractive for IT companies from all over the world. The numbers of expatriates who work in Bangalore have increased during the last few years. Currently, there are 40,000 expatriates who are working in India and the number is continually rising. The expatriates range from middle and senior-level workers, as well as fresh graduates. The attractiveness of taking an expatriate position in India includes growth opportunities, good compensation, and the value in which this experience adds to ones resume. On the other hand, the increased number of expatriates poses a threat to the local Indian workforce. Almost 15 percent of the 40,000 expatriates are in leadership roles. Expatriate managers have more abilities when compared to their Indian counterparts or so it seems (Growing Expatriates in Indian Companies). This may be due to expatriate managers are recognized for being able to handle diverse situations and have higher risk-taking abilities than Indian leaders. While some view this as a threat, others view this HR strategy as a way for companies to match up the right employee with the right job.
China Beijing, China

Beijing is one of the four ancient cities of China (together with Xian, Luoyang, and Nanjing), the best preserved and most widely recognized of the four. Beijing is also known as a cradle of humanity. As early as 700,000 years ago, Peking man (one of the oldest human fossils discovered) lived in Zhoukoudian, which is now an area of Beijing (Beijing History, 2012). Beijing City was established over 3,000 years ago and was called Jin City in the Western Zhou Dynasty (11th century BC - 771 BC). Ever since Emperor Qin united China in 221 BC, Beijing has played an important role in north China. It was the capital city in the Liao (9161125), Jin (1115-1234), Yuan (1271-1368), Ming (1368-1644) and Qing (1644-1911) dynasties. During these 800 years, 34 emperors lived and ruled here. The world-renowned Forbidden City was built during this period. At the end of the Qing Dynasty, World War I began and Beijing became the focus of invaders (Beijing History, 2012). The war disrupted Chinas society. Many residences of royal families were robbed and burned down. This reduced the whole country to the status of a semi-colonial and semi-feudal society. It was not until October 1, 1949 the People's Republic of China was founded. Beijing became the capital city of the prosperous new country, Peoples Republic of China (Beijing History, 2012). Beijing is located in northern China and is a direct-controlled municipality and is directly controlled by Chinas central government instead of a province. Labor Laws Beijing, China established laws to promulgate and improve labor standards in a rational and gradual manner. China has implemented a more open human resources policy since its adoption of reform and opening up to the outside world some three decades ago. Employers in China must comply with the following general principles established:
No discrimination based on nationality, race, sex, or religious affiliation Equal employment rights for men and women Equal pay for equal work
In addition, employees have the following rights under the Labor Law: The right to obtain employment and to choose their occupation The right to labor safety and hygiene The right to social insurance and welfare (China Employment Law Guide, 2005)
In Beijing, China, minimum wage is equal to $200 per month. In comparison, the federal minimum wage level in the U.S. is $7.25 per hour (Rapoza, 2012). A 40 hour work week employee would make about $1,257 a month gross for the lowest full-time workers in America. Demographics Beijing is China's second largest city in terms of population, after Shanghai. The population of Beijing has been increasing ever since the Peoples Republic of China was founded in 1949. In 2001, the population was 11.2 million. After 6 years, the total population has grown by 8 percent to 12.1 million in 2007. The above figures do not include the floating population, which are the people who move into the city during seasonal times to work and are similar to U.S. migrate workers. If floating population were taken into account, the population of Beijing has reached 17.4 million in 2007. One of the factors that resulted in the increase of population is due to the reform of the household registration system that led to a surge in marriages between residents in Beijing and those from other provinces. The average population growth rate was 1.3 percent from 2001-2007. The trend is expected to continue to increase in the next few years (Beijing Demographic Analysis and Economy Overview, 2012).
Culture Culture includes all of the knowledge, beliefs, habits, and laws that are specific to one group of people or one society. Groups of people living away from other groups develop different ways of doing things and approaching life. Culture has several meanings; one meaning is the habits of the people of a particular region, nationality, or religion. Beijing is the cultural center of China. Beijing has many connotations for culture. Beijing is just like the thickest encyclopedia, containing the cultural heritage of over 5,000 years of China history, absorbing the exploding knowledge of the current society, and foretelling the scenarios of the future development. An out-comer might find it hard to locate a portal for merging into the melting pot of Beijing culture, as the culture in Beijing is so complicated and elaborate that it deserves time to understand. As the capital for several ancient dynasties, Beijing owns plenty of royal elements in its cultural system. Beijing people are elegant and proud, but they seldom look down upon people from other regions. Beijing has never repelled outside cultures and fashions. Beijing shows a patient and considerate attitude for any culture so long as it is logical or reasonable to some extent. Therefore, you can easily find the traces of a great variety of cultures nationwide or even worldwide. Nevertheless, Beijing has never given up its noble taste for elite culture. Beijing is never stingy in offering compliments for the true talents (Beijing Culture, 2012). Language In Beijing, the language spoken is Mandarin Chinese. There are many notable universities in Beijing and two notable learning institutes teaching expatriates Mandarin Chinese. However, one issue with the language factor is that there are many dialects, which may be more difficult to learn. There are 300 million people in China who have had some form of English
education in China. This means there are about the same number of people English speaker in China that there are in the U.S. However, a large portion of this 300 million is people who have had English education in a formal setting and by no means should be considered proficient let alone fluent (Seeing Red in China , 2011). Economic Stability In 2010, Chinas GDP growth was a more than 10 percent, totaling over US$ 5,745 billion, and this trend was expected to continue increase by approximately 12 percent in 2011 to over US$ 6,422 billion. Forecasts for 2015 predict Chinas GDP to reach over US$ 9,982 billion, growing 10-12 percent per year between 2010 and 2015. China's economy is huge and expanding rapidly. In the last 30 years, the rate of Chinese economic growth has been almost miraculous, averaging 8 percent growth in Gross Domestic Product (GDP) per annum. China already has the biggest economy after the United States and most analysts predict China will become the largest economy in the world this century (The Chinese Economy, 2012). More specifically, to-date, China has largely been noted as a location to locate an export base or source product but increasingly it is also developing a significant internal economy that companies are focusing on because of its domestic market. The federal minimum wage level in the U.S. is $7.25 per hour (Rapoza, 2012). A 40 hour work week means $290 a week gross for the lowest full-time workers in America. In Beijing, China, minimum wage is $200 per month.The available cheap labor is a definite advantage for producing electronic components (The Economist, 2012). This is one of the main reasons why TBW is considering this country. However, in recent years, factory workers have demanded better wages and working conditions, thus the period of cheap labor may be coming to an end (Kurtenbach, 2010).
HRM Policies and Practices China's market reform is setting the stage for significant changes in management practices. The responsibility for labor allocation is being shifted from a centralized planning authority to forecasting and planning departments within enterprises. Production and reward systems are changing, with less emphasis on egalitarianism and a stronger emphasis on efficiency and performance. In addition, managers in China are already showing an increasing interest in using human resource techniques and motivational systems which emphasize productivity at the individual, group, and enterprise level. Current best practices in HRM can make significant contributions to the process of change undertaken by Chinese enterprises (Comparison of HRM policy and practices between China and UK, 2009). HR Trends The human resource department is the set of individuals who make up the workforce of an organization, business sector or an economy. HR departments have a balance to maintain as they play the roles of both employee and company advocates. HR has responsibilities that extend beyond the roles of benefits administrator, policy enforcer, and change facilitator. HR professionals have to manage their day-to-day responsibilities and prepare for global trends that will affect how they do business. The recent localization trend of hiring executives is primarily driven by cost savings. Although, foreign companies often invest in training local candidates, local Chinese salaries are significantly less than a foreign expatriates salary, and generally do not include benefits such as childrens education or expensive housing. Thus, hiring local executives is a huge savings for multinational companies, particularly for companies located in Beijing and Shanghai, as the
expatriate cost of living in these cities has recently surpassed New York and Tokyo (New Hiring Trends in China, 2012). In spite of this growing localization trend, talented local managers and executives are still not easy to find. Many companies in China have claimed a major shortage in leadership skills among local hires. Alternatively, oftentimes the talented managers and executives who are in high demand are already happily employed by another company. In addition, some of the most talented local hires are beginning to make salary and benefits demands that are beginning to approach those of their expatriate counterparts (at least in terms of salary). Another concern is the low number of graduates in China that meet the required experience to be hired by a multinational company. Many thriving multinationals, such as LOreal, have been most successful by investing in company specific training programs for young graduates and inexperienced local hires. However, after expensive and extensive training, such candidates are more poachable (New Hiring Trends in China, 2012).
Review of HR Factors
A global shift for any organization should not be taken lightly. A global move for TBW also brings up many international concerns that lead to many difficulties and legal problems that must be addressed. There are many aspects for an organization to consider when the business expands globally including, culture of people, language, laws of a country, expectations of pay, etc. (Plessis & Beaver, 2008). TBW must do research prior to expanding globally before determining how long expat assignments will last. TBW should also consider benchmarking other companies that have moved business to other locations and see what best practices have worked well.
China and India are countries with different rules and laws so there will be many legal aspects for TBW will want to compare when choosing the location for their manufacturing plant. The compensation and benefits will vary greatly since these are two different currencies involved. Additionally, benefits must be adjusted due to the differences in health care systems from one country to another and many other benefits should be considered, as well as reviewing the overall compensation to make it attractive for an expat and their family to move overseas. Most importantly, TBW should determine what will keep their employees and their families happy if they were to move abroad. Issues such as additional training, housing, language differences, and schooling should all be aspects that are equally as important as compensation (Glenn, 2008). For an expansion overseas to be successful, communication will be one of the most important factors to be considered. TBW must consider the ability to communicate with all different levels of people if they are to expand into another country. Both countries have the means to support teaching English to those that want to learn or improve their English. However, English has become a part of Bangalores culture, and for this reason, Bangalore, India seems like it may be a better fit when considering the language barrier issue when compared against Beijing, China. TBW should be concerned with maintaining a positive work environment. TBW should build a culture that expresses it values employees. Managers should be trained on how to effectively communicate with employees. Another area of consideration that TBW must not take lightly is the lengths it must go to in identifying the best talent for the global expansion, but before doing so, TBW must assess what knowledge, skills and abilities will be required to complete this expansion successfully.
TBW must look at the talent they already possess to see who may already have the experience or skills to help in this endeavor. Additionally, they will need to identify talent outside of TBW to assist with the expansion, as well as, identifying the type of talent required once the expansion actually takes place. TBW will likely have to utilize several methods of recruitment to fill the new jobs and find the right fit for the company. The TBW culture is in good standing, so to help maintain this across borders the selection process should be extensive. The global expansion will require TBW to do a considerable amount of restructuring, which will create many new positions many of which will be in the new location. Therefore, training and development will be essential for all positions to help retain employees and provide career paths to help the employees with their individual needs and ultimately help TBW to reach its goals. Moreover, training and development will assist with overall increased productivity, motivation and profits for TBW. TBW must be able to measure performance of their employees over time to help determine the high performers. It is important TBW chooses a method that aligns with their overall goals. TBW should carefully consider which performance method they utilize. With an expansion abroad, it will be important for TBW to maintain the company culture and have motivational strategies set in place. TBW should look at implementing an effective performance management system that consists of clear goals that align with the overall strategy of TBW. These goals will help to drive motivation of the employees and influence behaviors that can be measured. Furthermore, having goals that are measurable will allow the quality of the employees work to be assessed through performance assessments. Management can use the information measured to help coach and provide informational feedback to help employees reach their personal objectives and also to help reach TBWs overall mission. Frequent assessments
and providing employees with clear, developmental feedback of past performances and setting new obtainable objectives for the future will help employees to stay in line with their work expectations and achievements. Planning for the financial requirements for TBW to expand will be a high priority with the global move. All of the components of the company must be identified within a company budget. Additionally, cost savings area should be recognized to cut back in areas that are not necessary. Alternative methods to cost savings should be explored and adapted to help with reductions. To make TBW attractive to employees, in addition to the base salary there should be a total rewards program implemented. Compensation alone will not keep ahead of the competition, however adding other benefits that that complement work/life balance and career paths can help retain and attract the right candidates for expatriate assignments and hiring globally. In addition, TBW should benchmark other similar companies to determine what total rewards packages are offered to be competitive. TBW should consider implementing a total rewards program consisting of the five compensable factors including compensation, benefits, work/life balance, recognition, and career development. TBW should develop a total reward program that integrates these five compensable factors into one customized package to ultimately achieve motivation and employee engagement. TBW will have the competitive advantage if their total rewards program is well-designed, implemented and executed. A successful total rewards program strategy will support TBW by producing positive results in the form of increasing employee retention, increasing production, and increasing job satisfaction, as well as, attracting top talent.
TBW should design their compensation structure to incorporate an effective process for setting initial wages, pay increases and incentives. TBW must evaluate the positions, utilizing benchmarking salary data and reviewing salary for internal equity. The pay increases will link to performance factors that align the individuals goals subsequently with the department and TBWs goals. Recommendations China and India, both are known for specializing in two different areas. Whereas China is well known for its manufacturing capabilities, India on the other hand is better known for its Information Technology and call center jobs. Both sites offer pros and cons from a public relations standpoint. Offshoring the customer service call center side of the business would be an easier transition towards international expansion in India, but could potentially cause call center customer service problems. On the other hand, offshoring IT jobs to this same area might not be as controversial a move since the consumer would not be directly affected by this change and they would therefore not notice a difference versus a customer service call center department. From an IHRM perspective, it may make more sense to begin international expansions in this country and explore China as a future alternative. Expansion to China on the cell phone manufacturing end of the spectrum could certainly yield great benefits for TBW and would potentially help increase its customer base. The main reason for this is because it is cheaper to manufacture cell phones in China versus the U.S. due to lower salaries in China. Lowering the cost of production would help the organization lower the prices of its products and thereby making them more affordable and accessible to the general population. This would help TBW increase its customer base and position the organization to be better able to compete in the marketplace. However, another alternative TBW could choose to
take is to go the boutique route and focus on luxury products so it does not have to necessarily offshore manufacturing to China, but even then it is difficult to completely ignore this market given the industry TBW is in. According to CNN Money, even though the price advantage has decreased, China continues to be unchallenged supply chain of parts and materials in many industries and remains at the top for electronic manufacturing (Fox, 2003). Additionally, Asia has certain types of technology manufacturing; one being particularly well known is cell phone chip manufacturing among other technology manufacturing (Fox, 2003). As examined previously, Chinas labor costs are low compared to many other countries. Many organizations are attracted to China for their manufacturing needs due to the lower labor costs. One of China's largest employers, which manufacture about 40 percent of consumer electronics used worldwide compensates its assembly workers much lower wages than the U.S. minimum wage (Goldman, 2012). China offers another advantage many U.S. politicians choose not to discuss, which involves the high number of skilled engineers China has compared to the U.S. (Goldman, 2012). This is an obstacle that most organizations in the technology field are facing, so expansion to China is very difficult to ignore despite the challenges that must be overcome in order to successfully expand overseas. It makes more sense to initiate expansion efforts in a less challenging location (such as India) initially. TBW should also have a long term view of further expansion to other countries (such as China) in the future after the organization is able to obtain the experience, knowledge and skills needed from previous international expansion efforts, particularly from an IHRM standpoint. After a thorough analysis, the better choice from a human resources perspective is for TBW to initially set up operation in Bangalore, India. Although, both locations offer an abundant
labor pool, lower costs, economic stability, and a culture that values strong work ethic. Bangalore, India has better access to employees with a high-tech mindset and welcomes international investment, which is more desirable for TBW. In addition, the predominance of English language skills further adds to the benefit of Bangalore. China has been experiencing contention from the labor market related to the working conditions and the low salaries. In some cases, workers have begun striking in protest of these issues. If TBW located their operations in Beijing, China, they could face labor relations issues, which would damage TBWs culture, morale, productivity, and profits. Furthermore, Beijing, China cost of living for expats is extremely high. For these reasons, Bangalore, India is the better choice of these two locations for initial international expansion with possible future growth to China.
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