University of LimerickLimerick, Ireland

June 29, 2012

FramingResearch Institutional Effectson the

Central Organization Departmentof theon

ChineseExecutives

ChinesePerformanceManagement

and

IFSAM 11th World CongressManagement Re-imagined

Competent Chinese Cats

University of LimerickLimerick, Ireland

June 29, 2012

Allen D. Engle, Sr.Professor of ManagementEastern Kentucky UniversityRichmond, KentuckyUSA

IFSAM 11th World CongressManagement Re-imagined

Competent Chinese Cats

“It doesn’t matter if it is a white cat or a black cat, a cat that catches mice is a good cat.”

Deng Xiaoping - 1962

v

Competent Chinese Cats

• Chinese society values complex competencies

Overview

culturalfunctional

product

• Chinese society values complex competencies

• The COD’s role in accepting implicitperformance management processes is unknown.

Overview

culturalfunctional

product

• Chinese society values complex competencies

• The COD’s role in accepting implicitperformance management processes is unknown.

• How widespread is the impact of COD on “private sector” MNE performance management processes in China?

Overview

culturalfunctional

product

Competencies as Strategically LinkedEngle, Mendenhall, Powers and Stedham (2001)

• Cultural Competencies• Functional Competencies• Product Competencies

Complex Competencies

It is difficult to measure1. Courage2. Curiosity3. Compassion

Complex Competencies

Instead, we measure these competencies:

Cultural

Complex Competencies

Cultural

Complex Competencies

Functional

Cultural

Complex Competencies

Functional Prod

uct

But …Cultural

Complex Competencies

Chinesecultural competencehas 3 parts:

Chinese Cultural Competencies

Cultural

• Traditional Confucian Values “Ti” – substance or essence

Chinese Cultural Competencies

• Traditional Confucian Values “Ti” – substance or essence• Chinese Marxist Values

Chinese Cultural Competencies

• Traditional Confucian Values “Ti” – substance or essence• Chinese Marxist Values• Administrative

orEntrepreneurial Values

Chinese Cultural Competencies

¥

• Understanding modern business functions: Marketing Production Distribution HRM

• “Yong” – function or utility

• Self-strengthening effortsof the 19th century duringthe ill-fated “Tonzhi Restoration”

Functional Competencies

Functional

• Understanding productson a micro level

• Understanding productson a more macro level(industry)

Product Competencies

Prod

uct

Conflict

Conflicting Competencies?

• Within the 3 cultural competencies: Entrepreneurial Marxists?

• Between cultural and functional competencies

• Between cultural and product competencies

• Between functional and product competencies

Global Performance Management SystemsEngle, Dowling & Festing (2006)

Implicit Performance Management Systems

Inputs Process Outputs

Person Job Production

Glo

bally

Stan

dard

ized

Loca

llyCu

stom

ized

Implicit Performance Management Systems

• In November of 2004 the top executives ofChina Mobile,China Unicom, andChina Telecom were unexpectedly reshuffled

• Two firms were listed on overseas exchanges• One firm was preparing to sell shares offshore

Political competencies at the expense of entrepreneurial or product competencies?

Implicit Performance Management

• More public annual review of party personnel

• Professional merit and moral integrity• Professional achievements• Acceptance by the masses

• Regional gross domestic product

Emerging Explicitness?

Emerging Explicitness?

New Appraisal Forms Include Old Imperial Confucian Cultural Competencies As Criteria

The ultimate goal:A cadre of “Rencai” talented people

• “De” - Morality• “Neng” - Capability• “Qing” - Diligence

• “Ji” - Achievement• “Lian” – Uncorrupt

• Very little information on the COD even though it was founded in 1921

• Even less information on potential institutional effects (Festing, 2006) of COD activities on wider executive assessment processes in China

Institutionalism in China?

If the CPC is “The Epicenter,”How far out do the activities of the COD go to:

• State owned enterprises in critical industries• State owned enterprises in other industries• Collectives – “red hat” firms• Private firms – “Siying” or “Minying”• International joint ventures• MNEs doing business in China

How Far-reaching isCOD Institutionalism?

Cooke (2008) distinguishes between:

• Enterprise Workers

• Government Officials and Civil Servants

Which system applies to Chinese executives?

Dual Systems?

• What impact (if any) does the institutional context of the COD have for the very many Chinese-based outward foreign direct investment assignments going on today?

• Is there an exported Chinese executive culture?

Institutionalism Abroad

• Do Western-based MNEs make adjustments in executive performance management systems going into China?

• Do Chinese-based MNEs make adjustments in executive performance management systems going around the world?

Convergence - Divergence

Interesting issues, but problems remain:

• Assessing knowledgeable actors• Verbalizing competencies• Research designs to measure the institutional

effects of the CODs practices

Finding the cats if they don’t want to be found

Conclusions

• COD activities are a critical aspect of China’s efforts to balance economic development and political stability.

• Understanding unfamiliar, complex, person or process-based performance management systems may assist MNEs in dealing with increasing geographic and cultural distance.

Why Bother?

• Institutional effects on HRM practices may consist of– “Harder” elements:

Legislation– “Softer” elements:

Traditional governance practices, preferences and schemas

• Some GPM systems may be characterized byimplicit, person, or process based models,rather than theexplicit, objective outcome-based modelsprescribed by U.S. experts

Why Bother?

Thank You for Your Attention

University of LimerickLimerick, Ireland

June 29, 2012

IFSAM 11th World CongressManagement Re-imagined

Presentation by Ron Yoder

Questions?Comments?

Allen.Engle@eku.eduwww.people.eku.edu/englea