PEOPLES REPUBLIC OF CHINA
Old Chinese values like trust, taking care of aged parents, mutual respect, etc. still dominate China today whereas corruption, nepotism, bureaucracy etc. which are the negative aspects of socialism, have also entrenched themselves following the communist takeover in 1949. The current political model of China today is a mixture of socialism and free-market capitalism, especially in the economic sense. China today can have their cake and eat it too. They can suppress pro-democracy uprisings in Hong Kong taking a communist-socialist stance, and at the same time, they can try to privatize their white elephant SOE’s (State Owned Enterprises).
Two huge advantages that the four young entrepreneurs in the case, have over other foreign companies investing in China and setting up their own businesses are that (a) There is no cultural incompatibility with mainland China as China and Taiwan are related culturally from centuries, (b) The project will start from point zero as the existing guesthouse will be dozed and the new four star hotel will come up on that area. This will symbolize a totally new organization and new organizations have new rules and new hierarchies.
Mike, Guo, Kai and Li Ping should never be ruthless in laying off people who prefer the earlier slow public sector style of working and do not want to work as per the standards of the private sector all around the globe. If they do so, then they will alienate influential people and generate adverse publicity. Firing is not the only solution to the problem. In the new hotel, the organizational structure should be such that most of the departments which are superfluous should be eliminated. Even those departments which are necessary should be altered that a new manager holds the power independently or at the very least, the old managers do not have absolute power but share it with a new manager. Deprived of power, those who cannot match the efficiency will be forced to either change or resign. Employee exchange programs with the group’s other hotels and guesthouses in Taiwan will also be fruitful. Finally, the laying off an elderly employee with full redundancies in a totally private way should be exercised. Mike, Guo, Kai and Li Ping should not do all these simultaneously but in stages, as per the Chinese way. It is here that their common cultural roots will help and goodwill loss will be at a minimum.
A ubiquitous shape hovering over all relations in China is Guanxi. The closest translation of guanxi into English may be interpersonal relationships or networking. Guanxi is a sort of invisible credit or debit records cum store of goodwill and influence which you can resort to in your interactions with other people. Guanxi is relevant for everyone (except Robinson Crusoe maybe). It’s a sort of ‘you scratch-my-back-and-I’ll-scratch-yours-but-if-you-don’t-want-to-today-that’s–fine’. It is not blackmail by any flight of imagination.
Reverting back to the case, the “Tiger Leaping Guest House” (TLGH) employees had full job security before the take-over. They were sure that their salaries would be paid irrespective of their work output. Therefore, there was nothing to motivate them. Marketing staff would say to booking agents that the hotel was booked full despite there being plenty of rooms vacant at any time. Some even used official time for their own personal work. Obviously, these things could not be done and kept confidential in an organization. These unethical (and in many cases, also illegal) activities could be done because of the positive Guanxi enjoyed by the employees with their superiors. Conversely when the superiors shirked work at more profitable levels, they used their guanxi with the employees, so that no one outside the department knew comes to know. Guanxi is long term as Sylvia Forhauser-Smith says in Fortune Magazine “Not a one-off or short term transaction, guanxi relationships are built to endure. Personal favors shift back and forth over many years.” (2012).
Again, guanxi helped Mike, Guo, Kai and Ling-Pi too. The cousins locate their long separated relatives and find them in influential positions in the government. This is the family guanxi which they use to get relevant information about what they needed to know. During the acquiring process too, their relatives helped them by providing information and tips on what are the procedures to be followed and speeded up the process. The four cousins were also assured of their relative’s constant help whenever required which firmed up their resolve, to make the project a success.
Guanxi by itself cannot be said to be a productive or counterproductive process. It depends upon the context. For example the guanxi in the hotel among the employees was counterproductive to the taxpayer but it was productive to the employees. Without a context, guanxi is neither positive nor negative. Its value is relative to the purpose of the beneficiary.
If training is to be given to ex-SOE employees, then the most important thing one has to do to compile a suitable training course, keeping in mind the areas where the trainees will be lacking in knowledge and/or experience. These will be in
- Team Management
- Leadership and Motivation
- Performance Appraisals
- Effective Communication
- Value Addition by Quality enhancement.
These management branches have been selected because people had no need of these when the workplace was considered as a fundamental right. There were no deadlines or targets. Competition was more or less unknown as the state purchased your product. All these will change as privatization will want every employee to contribute his or her share. Passengers in the bus will not be tolerated. With the help of training in these main areas, the employees will not become experts overnight, but they will know what each activity means, why it is important to increase productivity and /or reduce conversion costs, how it will benefit the organization and how this will in turn, benefit them.
Chinese employers appear to prefer candidates with international exposure and linguistic abilities. Technically as well as commercially sound, Ability to adapt to different teams, Hands on experience in a particular field and finally lateral thinking and creative abilities. Thinking out of the box capabilities is desired badly. The Economist argues in an article called ‘Mixed Bag’ that Chinese SOE’s are very good in infrastructure but not in innovation (January 2012). The article further says “In October 2007 China's president, Hu Jintao, unveiled his highest priority for the future at the 17th National Congress of the Communist Party in the Great Hall of the People: improving the country's “capacity for independent innovation” But till now the results have been nothing to write home about.
The following skills score high in employability.
- Skills connected to international exposure
- Technical Expertise
- Work adaptability in a global environment.
- Linguistic abilities.
- Understanding of International Systems and Procedures
- Communication, Presentation and Inter-personal skills
- Hands-on Experience in the industry advertised.
- Skills Present to some extent/ to be developed further.( Mantell, 2012)
- Creative Thinking; Out of box thinking
- Flexibility. Not reluctant to move out of comfort zone to acquire new skills.
- On-line branding & Professionalism.
- Initiative, Ability to see ahead and identify competitor activities / industry trends.
As far as Human Resource Management is considered, HR practices used in China are different from those used in the West. The main areas of difference are in Performance Management, which is linked to financial motivation packages usually. This is however not true in China where SOE’s ruled the roost till only twenty years back, more or less. Here, the average employee is used to control management and rarely give feedback. Therefore, information trickles down mainly top to bottom and the flow in the reverse direction is limited. This is different from Western Firms which favor empowerment rather than control. Of course, control has to be present as without control, processes will run wild. However, the lesser the control, the more is the innovation. Traditional Chinese companies seem to lack innovation abilities as in the West. Chinese HRM also incorporates Confucian values of dignity, mutual respect etc. Chinese superiors will rarely do anything which will cause the subordinate to lose face in public. However, these are early years and only time will tell what HRM practices will be in vogue in 2025 AD.
REFERENCES
Mantell, R. (11/18/2012). ‘Must have job skills in 2013’ The Wall Street Journal. Accessed on the Internet from WSJ online. < URL http://online.wsj.com/articles/SB10001424127887324735104578118902763095818>
Vorhauser-Smith, S. (10/05/2012). ‘Why competence alone won’t cut it in China’. Accessed from Forbes online < URL: http://www.forbes.com/sites/sylviavorhausersmith/2012/05/10/why-competence-alone-wont-cut-it-in-china/>
