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ning the type of culture prevalent, it is impossible to deal properly with issues of cultural integration. In more recent times, a significant problem in China concerned company specific culture. For example, there are SOE workers that have communist philosophies that everyone is equal but when MNE's enter the scene, they are often perplexed that managers ask them to focus on customers or implement a system where top performers are rewarded while those falling behind are punished (Bacani & Peavy-Sima, 2006). Many of these workers find it difficult to adjust to a culture where their performance is constantly graded against others and this is the modern dilemma for MNE's. Another example is that of Philippine company Jollibee Foods whom setup in China and experienced issues with cultural alignment. Philippine managers and employees were accustomed to a democratic environment and having the freedom to raise concerns with superiors but in China, the culture is more authoritarian with a greater power distance between workers and superiors so it deemed acceptable for managers to be controlling and for workers not to raise immediate concerns (Bacani & Peavy-Sima, 2006).

MNE's also need to see some of the implications of failing to address cultural integration issues in China. The coexistence of traditional and reformed economic, institutional, and cultural systems in China has created strong resistance to change so consequently, problems arising for MNE's in human resource areas cover job design, leadership, motivation, performance and productivity improvement, and especially in organizational development through knowledge transfer (Wang & Wang 2006).

Knowledge transfer according to Saka-Helmhout (2009) refers the movement of knowledge, policies and practices from home countries to host countries and flow can be one-way from the parent to the subsidiary or two-ways between the parent and subsidiary. Employees in a home-country have many sources of power they can use to block the transfer of knowledge, for example, they assumingly have superior knowledge of the language and culture which can be used to promote local culture and restrict MNE impositions on them (Saka-Helmhout, 2009). It is also worthwhile mentioning that expatriates have the ability to facilitate, disseminate and transfer standardized MNE practices and knowledge into host countries. Research by Gamble (2003) suggests that companies with a high expatriate presence will abide by management practices of the MNE and be wary of traditional host country practices to close the cultural gap. This is primarily because expatriate managers play a control function role in areas such as setting overall strategy and transferring much of the administrative heritage. Expatriates also spread explicit knowledge through the adoption of employee handbooks, training manuals and standard operating procedures as well as valuable tacit knowledge of ways of managing the organisation (Taylor et al, 1996).

An example of this is evident in the UK based ‘StoreCo' who set up operations in China named ‘DecoStore' to serve the local market. Expatriate managers for DecoStore participated in and oversaw the entire operation and this allowed for long term dialect with Chinese employees in which cultural values and expectations, on both sides, were negotiated and this set a platform for effective knowledge transfer. Essentially, DecoStore demonstrated that even