AN INVESTIGATION ON WELL PERFORMING CHINESE ENTERPRISES FEATURES OF HUMAN RESOURCES MANAGEMENT.

Author:Liu, Kuang-Che
Position:Report
 
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INTRODUCTION

Asian markets and economies experienced tremendous growth in the later half of the 20th century. Regional economies in China, Taiwan, Hong Kong, Southeast Asia and other pan-Chinese areas achieved remarkable achievements in economic performance. Given these results, the management features of Chinese enterprises have become a topic of interest for many researchers. Unlike western enterprises characterized by active pursuit of systematic scientific management, eastern enterprises place greater importance on the rule of man and its concepts. Such phenomenon has inspired many researches on the characteristics of upper management structure and leadership of Chinese enterprises which have been described as paternalistic (Silin, 1976; Redding, 1990). Redding's study (1990) identified social harmony to be the ultimate value of Chinese societies. When compared against their Western counterparts, Chinese corporate leaders tend to do their best to avoid open confrontation within the business organisation. Farh & Cheng (2000) further pointed out that Chinese businesses tend to have an atmosphere of personal influence characterized by benevolence, authoritarianism and moral leadership. Differences in leadership approaches between Eastern and Western organisations not only highlight the question of cultural compatibility of management theories and approaches, the unique organisational culture of Chinese enterprises featuring Confucian philosophies also attracted the attention of many Western scholars. Such leadership styles have also been regarded as a key element for molding organisational culture.

Chen & Partington (2004) also compared differences between Chinese and Western cultures, noting that Chinese enterprises focus on Collectivism and are largely characterized by large power distance, strong uncertainty avoidance (ability to tolerate uncertainty and ambiguity that run contrary to the rules), conservatism and experience tensions between established hierarchy and harmony. Western enterprises, on the other hand, emphasize autonomy and experience tensions between mastery and egalitarian commitment. Luo (2008) provided further descriptions on the differences between Chinese and Western multinational corporations from the aspect of international business negotiation. Western enterprises focus on logical analysis, economic and interest-driven guidelines, free competition and independent thinking modes. Chinese MNCs, on the other hand, have been long influenced by Confucian ideals and philosophies and thus focus on long-term collaboration and mutual consensus while placing greater importance on interpersonal relationships and emotional exchange.

The concept of leading change emerged as a response to rapid and drastic changes to the knowledge economy as well as the general business environment. Leading change emphasized that organisations need to remain constantly vigilant of changes to their environment and make adjustments as required. The key to successful leading change lies in clarity of vision, employee participation and building of an organisational culture. Many researchers, such as Cabrera & Bonache (1999) believes that HR specialists can systematically refer to the organisation's overall strategy and design HR activities in order to better align organisational culture to its strategies and build a strategic culture. Harris & Ogbonna (2001) pointed out the management may use HR strategies to create an organisational culture adapted to the latest environment and other aspects of competition to enhance organisational performance. Saunders (2009) also found that when encouraging organisational development or transformational management, existing organisational cultural features may be incorporated to lower resistance to transformational efforts in order to build better consistency between HR activities and organisational strategy, create a new culture and achieve improved performance. The values of Chinese management philosophy include organisational stability and internal harmony. Whether or not such philosophical values are able to help organizations accumulate HR capital and improve organizational performance will be an important topic of research.

Literature Review and Hypothesis of this Research

Strategic Level of Human Resource Management

HR management is one of the most important functions of any enterprise. However, since HR activities often fail to demonstrate tangible benefits, many enterprises and organisations tend to neglect this area of management (Prowse & Prowse, 2009). The arrival of the Knowledge Economy brought with it digitalization and globalization that accelerated the transformation of the industrial environment. Some researchers therefore began to use the strategic level of HR departments to assess the value of HR in this corporation. For example, research conducted by Galbraith & Nathanson (1978) on the relationship between HR management and corporate strategies showed that any strategic change may lead to differences in HR activities. Dessler (1994) further pointed out that in a rapidly changing environment, the only means of achieving business differentiation and competitive advantage would be HR strategies. Milkovich & Boudreau (1994) defined HR management as a set of management activities that treats the entire organisation as a whole and include aspects such as continuous learning, flexible response and provision of feedback at any given time. As a result, when evaluating the strategic level of HR management, some researchers had defined it according to the history of HR development. Fomburn, Tichy & Devanna (1984) divided the evolution of HR management into three stages: operations, management and strategisation. Lawler III (2005) also gave a comprehensive definition for the history of HR management, starting from the original Personnel Management (PM) system, to a facilitator of organisational transformation, to its modern status as a strategic partner. This evolution clearly demonstrated that advancements in the business environment were accompanied by increasingly important roles of the HR department within its organisation.

When viewed from an organisation's lifespan, HR often provides administrative support in the earliest stages of development. Once the organisation initiates its stable and growth phase, demands for specialized HR techniques (selection, utilization, training and retention) will increase, transforming the role of the HR department into that of a specialist. Once the organisation enters a period of steady growth and sizable scale, it would need to retain its competitiveness and generate core business differentiation and competitive advantages. Organisations in the modern Knowledge Economy can only achieve these objectives by investing in human capital. At this stage, HR department must play the role of a strategic partner and provide support to build up human capital while making necessary adjustments to various management activities and align them to the organisation's strategic objectives. Martell & Carroll (1995) referred to the role of the chief of HR departments in organisation-level decision making teams to divide HR chiefs into 3 categories, namely: functional managers, specialists and strategic partners.

These studies provided perspectives that demonstrated the strategic level of HR departments would be determined by the level of participation of HR departments in the organisation's decision making processes. Recent literature also demonstrated that HR strategies will help organisations align their management activities and strategic objectives to improve their organisational performance. For example, Huang (2000) employed cluster analysis that compared Taiwanese enterprises with good performances with those that demonstrated poor performances to see if there were any differences between the strategic level of HR departments and HR activities. Outcomes demonstrated that enterprises with good performances not only exhibited higher levels of HR participation and activeness in the enterprise's decision making processes, but also included more human capital concepts within its HR activities. Additionally, Lee, Lee & Wu (2010) conducted an empirical research on the relationship between HR activities, corporate strategies and organisational performance in Taiwanese steel industries. Research outcomes showed that higher levels of participation and activeness of HR departments in the enterprise's strategy planning processes allowed achievement of better organisational performance. These studies showed the value and importance of HR activities in improving corporate strategy planning and organisational performance.

Forms of Human Resource Management Strategies

Dyer (1988) referenced organisational and HR...

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