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What are the main challenges that La Costbucks will encounter setting up in China?

Topic : HRM in an International Context

HRMIC Assignment – ‘La Costbucks’

La Costbucks is an Italian coffee bar chain specialising in organic high quality coffees and Italian pastries. Its unique stance on CSR (corporate social responsibility) and ethically sourced delicious products have made it a big hit in Europe where it also has stores across the UK, France and Spain. La Costbucks is looking to break into the Asian market and is planning to open its first stores in Shanghai and Beijing (China).

As before, the new stores will operate in a very similar way to operations in Italy (HQ), with the same product line in order to retain their individuality and unique ethical selling point. A General Manager (PCN) has been identified and is available to be flown over to China in the first instance from Italy, but the company require more advice on staffing policy and whether to hire local staff for management positions (as well as at barista level)?

The company has approached you, as an experienced HR consultant, to advise them about key HRM considerations for establishing their business in China. Your report should address the following key question and make clear your reasons for recommendations:

What are the main challenges that La Costbucks will encounter setting up in China?

Answers will debate:

  1. The pros and cons of pursuing a CSR strategy in China.
  2. The key cultural differences between Italy and China and how this may impact HRM and managerial practice.
  3. The most effective IHRM staffing strategy to adopt (citing appropriate models)
  4. The difficulties expatriates (PCN’s & TCN’s) specifically may face adapting in China and ideas to overcome these.

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