US-China joint ventures Essay
Today, the US-China joint ventures whose employees are predominantly Chinese nationals face the task of integration of international experience in personnel management in the specific organizational culture, as the extent of globalization and economic openness does not allow Chinese companies to operate and develop in a vacuum. In this regard it is necessary to determine the current state of the personnel management system in the company to increase its competitiveness in the global market.
The main problems of personnel management of Chinese companies
In Chinese companies, both theory and practice of human resource management meet a number of topical issues (Alon, 2003; Kim et al., 2010; Selmer, 2007):
Lack of qualified specialists, as the market of professional managers in the country is still being formed and so far underdeveloped;
High staff turnover. The survey of 12 companies in 2001 showed that 27% of employees left for other companies or went abroad. Individuals wishing to create their own company made 34%, and those wishing to go abroad – 18.9%.
Urgent problem of motivation of managers to work and their conduct control, the difficulty in creating an organizational culture;
The problem of creating reserves of managers and improving the effectiveness of the management team in companies, as well as creating harmonious and long-term relationships between employers and professional managers.
The analysis of the results of the company activity allows us to make the following observations. First, accounting model and functional model of personnel management are at present dominant in Chinese companies; second, there is a link between the influence of organizational culture and models of personnel management. Accounting and functional model of personnel management in a China-based company is characterized by the following (Kim et al., 2010; Yu & Egri, 2005):
1) HR Manager plays a minor role in the company, respectively, he/she is not involved in making strategic decisions of the company and his/her activity has predominantly personnel-administrative function.
2) There is no distribution of competences between line managers and specialists in the field of personnel management, i.e. an HR Manager renders an insignificant assistance to line managers in the process of implementing the policy of personnel management. This feature is largely explained by the national culture of China.
3) Control and accounting functions dominate in Chinese companies. We believe that the prevalence of the main characteristics of the accounting and functional models in Chinese companies is preconditioned by the strong influence of national culture and underdeveloped theory of personnel management.
Despite the fact that the joint ventures apply Western management practices, the strong impact of national culture still does not allow Chinese companies to fully adopt global principles of personnel management (Yu & Egri, 2005). The dominance of clan organizational culture can still be observed. Thus, it is possible to make a conclusion that the accounting and functional models of personnel management prevailing in Chinese companies are determined by the type of clan culture (Selmer, 2007).
There are factors such clan culture, as the high concentration of power in decision-making and family relationships, constraining the development of staff competencies necessary to operate under market conditions typical of a market culture, and as a consequence, these factors hinder the development of Chinese companies. The clan culture is a restraining factor of the development of models of human resource management which does not allow Chinese companies to develop competencies and management approaches which are now necessary in the context of globalization and openness of business, which can be a serious obstacle on the way of the development of Chinese companies in the future.
Thus, the following factors have a negative impact on the development of HR-management in a joint venture (Alon, 2003):
High concentration of decision-making authority. Company managers often invite their relatives to important positions in the company, the hired staff cannot participate in making important decisions, and consequently people see no prospects and opportunity for career development in this company. This contradicts the principle of human resource management model, which manifests itself in the management of potential opportunities of the staff.
Family-like relationships between the owners and staff, where the owner acts as the “father”, and the staff as “children”, respectively the staff completely obeys the head of the company. For his “children”, the “father” solves all issues instead of HR manager (recruitment, selection, evaluation, rewards). All depends on the personal opinion of the owner, and of course these decisions cannot be objective, which significantly hinders the development of the organization in general and contradicts the principle of human resource management model “personal development of staff.”
Recommendations for the further development of organizational culture
To further develop the system of personnel management inside the company based in China, the following recommendations should be considered:
• the functions of managing incentive systems and motivation should be improved (Magana & Stai, 2011);
• managers should implement a model of human resource management, which will provide long-term achievements of the company, based on Western methods, techniques and practices of personnel management (Yu & Egri, 2005);
• more attention should be paid to the function of training and development of the staff, which is designed to display and develop of the competencies of the workforce that are necessary for the successful activity of the company in a global environment and an open economy. This is due to the fact that in the 21st century, human resources and in particular the knowledge of staff and management of the company are the key factors in the competitiveness of the company (Afiouni, 2007);
• CEOs and line managers should seek to create and develop an effective organizational culture based on the exclusion of the negative factors of the national culture of China, such as the high concentration of authority, family-like relationships, while preserving such important values as hard working nature, loyalty, self-discipline, self-improvement (Alon, 2003). CEOs should give some powers to their managers and take care of their personal development, changing the attitude to the staff in general.
Typically, the company conducts the evaluation and certification of the personnel annually; however, sometimes simplified procedures for assessment should also be applied every six months. Strict control and assessment of strengths and weaknesses of employees can provide them with necessary assistance in retraining in order to correct their deficiencies (Afiouni, 2007). It is advisable to effectively encourage professional training which would include four programs: upgrade qualifications; training of management capabilities; learning of organizational culture and norms of behavior; and training of clients.
It should also be taken into account that in traditional Chinese culture, collectivism is stronger than individualism, and family and team of the companies are valued higher than an individual. Therefore, cooperation and diligence of the Chinese workers should be valued more than any innovation (Magana & Stai, 2011). Thus, a joint venture should gradually establish strict standards of organizational behavior of its Chinese employees simultaneously allowing them to make mistakes, promoting innovative ideas and presenting broad powers at their workplace.
Conclusion
On a whole, Human Resource Management is now perceived by modern Chinese managers as the key to achieve the effective functioning of the enterprise. Providing high quality of human resources potential is a decisive factor of efficiency and competitiveness of modern public enterprise. And this can be achieved through management that ensures the development of high-class professionals. It should be emphasized that this condition in the modern world community becomes impossible without long-term planning. Therefore, the systematic development of human resources potential of a company is provided by modern HR management strategy, which in turn includes a list of basic principles, rules and objectives of work with the staff. In expanded form it is supplemented by specification, taking into account the type of the company’s overall business strategy, organizational and human resources potential, and the direction of personnel policy.
