Guanxi has a big influence in the daily life in China and is often stressed that personal networking, guanxi, is the most important factor when doing business in China. Geert Hofstede argues that the Chinese culture is collectivistic. “This refers to a tight social framework in which group members (relatives, clans, organizations) focus on the common welfare and feels loyalty to one another”. (Lecturers notes 12.11.05). As a result China has a society that fosters strong relationships in which everyone takes responsibility for their fellow members of the group.
China ranks high on power distance. This refers to “the socially determined unequal distribution of power among individuals and institutions within a particular culture”. (Lecturers notes 12.11.05) As a result of the large power distance there is great distance between managers and subordinates. This has lead to different approaches in communication, where Chinese managers believe that problems are not the concern of staff. Chinese employees rarely take initiatives and normally pay more attention to maintaining a harmonious relationship.
Masculinity is said to be relatively high, indicating the gender differences within the country. According to Hannagan “this pertains to societies in which social gender roles are clearly distinct, i.e. men are supposed to be assertive, tough and focused on material success”. From a cultural perspective “the more ‘masculine’ a society, the more it values outcomes, assertiveness and materialism. Less concern is shown for quality of life.” (Hannagan 2002) Hofstede’s analysis of China also states a Long-term Orientation, indicating a society’s time perspective and an attitude of perseverance.
EXPANDING INTO THE CHINESE MARKET
The ability to transfer knowledge effectively across borders is a key characteristic of successful multinational enterprises (MNEs). The following are some HR initiatives British Airways could employ in staffing their Chinese subsidiary. The multinational enterprise could adopt an ethnocentric approach to staffing the subsidiary. An expatriate manager should be hired as the subsidiary manager and should work directly with other key HNC middle-managers to effectively implement strategic HR planning for the organization. This designate should demonstrate strong leadership qualities, promoting and implementing transparent management policies which would allow employees to feel united with management and would aid in alleviating the power distance culture which exists in Chinese organizations.
The organization should adopt a localization approach to recruitment, by selecting local staff not only to reduce costs but also to have a pool of employees who has a fair understanding of the local market. These practices should be systematic, involving diverse channels, including newspaper advertising, headhunting, and visits to universities. An effective training and development system should be implemented for locals as this would satisfy their thirst for knowledge and it will also give them the message that the company is committed to their development. It would also address the issue of locals faring poorly in terms of taking initiatives and taking on responsibilities, particularly if they are reluctant to do so because of their lack of skills or knowledge.
Training and development would also equip locals with the skills and expertise needed for upward mobility. Appropriate empowerment measures not only make employees’ jobs more motivating and rewarding, but that employees in turn will add more value to the organization.
Staff should be evaluated in accordance with their performance as performance-based wage and promotion systems well suits Chinese people’s work philosophy. Performance management is vital in order to retain local staff. Hence a well-planned performance management scheme should be implemented. Techniques should be developed to evaluate which employees need more training and development and how to reward in the most suitable way. For a Chinese, salary related to performance is vital for motivation. Therefore bonus packages would be considered a very good reward system to make people work hard as well as retaining Chinese employees. However, it is imperative to have constant dialogue with each employee and identify what is important for him or her lives, as people are motivated by different things.
Acc. to (Poole 1999) What is happening today in the field of HRM is nothing short of revolutionary. It has been accepted both from a domestic and international standpoint that employees create an important source of competitive advantage. The role of the IHR manager however will vary depending on the organizations strategy on international orientation and the approach it takes to IHRM. It is critical therefore that these managers are able to interpret international organizational strategy and develop IHR policies and practices which supports that focus and would in-turn enable them to maintain sustainable competitive advantage.