The Evolution Of Management Approach

Published Date: 02 Nov 2017

Program:

BABMS

Module Number:

BHL 6004

Module Title:

People, Organizational & Society

Student Name:

Wang Na

Student ID:

1007006957

Matriculation No. :

20048151

Submission Date:

12th of April 2013

Word Counts :

2940 words

Lecturer:

Dr. Poh Lee Guan

Table of Contents

Page No.

1

Introduction

1

2

The evolution of Management approach in He Nan Province of China for the last fifty years.

2

3

Situational Analysis of He Nan.

3.1 Organizational Structure

3.2 Culture

3.3 Human Resource Management

4

4

7

4

Situational Analysis of United States (2nd country)

4.1 Organizational Structure

4.2 Culture

4.3 Human Resource Management

8

8

10

5

Comparative analysis between He Nan (China) VS United States.

10

6

Predictive changes in He Nan (China) for the next ten years.

12

7

Summary

13

List of References

1. Introduction

The main objective of this report is to analyze the changes to the nature of work between one of the China’s province-He Nan and United States. The 2nd section gives a brief description the changes of He Nan in the management approach for the last 50 years(1960s-2010s). The 3rd section provides an analysis of leadership, culture and human resource management which related to the native people , and discusses how those affect on people, organizational and society.

The 4th section investigates the 3 aspects of the 2nd country-United States as what was elaborated on the 2nd part. The 5th section provides a comparative analysis among He Nan and United States. The last section predicts the potential changes in He Nan province for the next ten years.

2. The evolution of Management approach in He Nan Province of China for the last 50 years

He Nan is located in the central part of China which is a birthplace of Chinese civilization with more than 5000 years history, and maintained China’s cultural, economical, and administrative center until approximately 1000 years ago. With a population of approximately 93.6 million, He Nan is the second most populous Chinese province after Guang Dong. Referring to the economic aspect, He Nan has seen rapid growth in its economy over the last 20 decades, even its growth rate turns out to be higher than national average of 10%. Date back to the 60s of He Nan which had been suffered a great famine at that time, and tens of thousands of people lost their life under such a tough circumstance(He Nan-China, n.d).

The management approach to He Nan has changed significantly from 1960s to 2010s. With the purpose of adapting to the construction of large scale economic, from 1960 to 1977, Chairman Mao Zedong proposed drawing lessons from the Soviet Union and intended to explore a socialist road which is based on China’s current situation. From 1978 to 1983, Government-led management was implemented to expand production and develop the enterprise management stage by an exhibition of the scientific management. Scientific Management is a theory of management that analyses and synthesizes workflows, improving labor productivity (Khurana, 2009; Samson&Draft, 2009).

In order to improve production efficiency, a market-oriented management was introduced to He Nan from 1984 to 1991, which oriented to develop business management. And then in the followed year from 1992 to 1998, the management stage was shifted to seize the share of the mass market, after that, a new management stage came out from 1999 to 2004, at this stage customer-oriented approach was applied in the market by using the scientific management. Lastly, from 2005 to present, comprehensive social responsibility management method was implemented within companies (Cioage, n.d).

Based on the above information, it can be seen that Chinese enterprises’ management is not only copy and paste from the foreign management model, but relied a lot on Chinese traditional culture. Companies absorb foreign management thoughts, advanced theories, and methods then apply to the company’s daily operation.

3 Situational Analysis of He Nan

This report discusses the following 3 major areas in the study of People, Organizational & Society:

Organizational Structure

Culture

Human resource management

3.1 Organizational Structure

Organizational structure is the pattern of relationships among positions in the organization and among members of the organization. Structure makes possible the application of the process of management and creates a framework of order and command through which the activities of the organization can be planned, organized, directed and controlled(Mullins, 2005 ). Some structure is necessary to make the performance of the key activities more effective as well as to support the efforts of staff, always, it defines tasks and responsibilities, work roles and relationships, and channels of communication(Mullins, 2005).

Many successful Chinese companies have a hierarchical organizational structure where top leaders possess the company direction. For instance, in some of the He Nan companies, some enterprise organizational structure is top management to lower management, lower management step by step upward for instructions. It is a top-down communication which from top decision makers to employees. That is to say only the top executives can make decisions for the projects. All the managers and workers can do is to follow the order, implement the plan, monitor the operating of the project and report back to the higher-authorities (Lee, 2011). As a result, less decision making authority is pushed down to the lower levels in the organization and the organizational hierarchy is overloaded.

3.2 Culture

Culture consists in patterned ways of thinking, feeling and reacting, acquired and transmitted mainly by symbol, constituting the distinctive achievements of human groups, including their embodiments in artifacts; the essential core of culture consists of traditional ideas and especially their attached values(Hofstede,1984).

He Nan is an important birthplace of Chinese civilization with profound historical and culture significance. Among Taoist, Buddhist, folklore and other sources, Confucian tradition and philosophy stand out as a defining foundation of He Nan culture. There are respect for age and hierarchy, group orientation, perseveration of face and the importance of interpersonal relationships (Child, 1994; Lu, 1996; Hoon-Halbauer, 1999). In order to measure national cultures, Hofstede’s model which has five dimensions is most widely followed. There is a diagram of Hofstede’s model as follows:

Figure1: Hofstede’s five culture dimensions

Power distance is the extent that less powerful people within society expect and accept that power is distributed unequally (Brown et al, 2005; Hofstede,1998). He Nan has a higher ranking of Power distance which prefers hierarchical bureaucracies, strong leaders and a high regard for authority. In some centralized companies of He Nan, only the top management can make decisions, and the employees just follow the tasks which allocated to them.

Individualism as a cultural dimension is defined as the extent that ties between individuals are loose, and that people are expected to look out for themselves (Brown et al, 2005; Hofstede,1998). He Nan tends to be a highly collectivist culture where people act in the interests of the group and not necessarily of themselves. A society with low individualism index would have strong group cohesion, and there would be a large amount of loyalty and respect for members of the group. In addition, people always believe that personal needs are less important than the group’s needs.

Masculinity pertains to societies in which social gender roles are clearly distinct, men are supposed to be assertive, tough, and focused on material success (Toomey, 1999; Hofstede,1998).He Nan is a masculine society which emphasizes status derived from wages and position, many Chinese will sacrifice family and leisure priorities to work so as to ensure success. Take the office clerks as an example, with the fierce competition among staff members, people will leave their families behind in faraway places in order to acquire the job promotion and better pay of the work.

Uncertainty avoidance refers to the extent to which the members of a culture feel threatened by uncertain and unknown situations and the extent to which they try to avoid these situations(Toomey,1999; Hofstede, 1998). He Nan has a high score on uncertainty avoidance, within a company of He Nan, supervisors tend to subordinate to carry on the strict control and clear instructions, in order to ensure that every process occur in the company is no deviation. In addition, people prefer to prepare a detailed plan which focus on the tactical aspects of a project.

Long term orientation focuses on the degree to which the society embraces, or does not embrace, long-term devotion to traditional, forward-thinking values (Melkman et al, 2005). He Nan has a high long term orientation, people focus on future, pay attention to saving, thrift and reserves, also leave room to do everything. On the other hand, people prefer to invest on the real estate in order to achieve a long term profit.

3.3 Human resource management

Human resource management(HRM) involves all the management decisions and practices that directly affect or influence the people, or human resources, who work for the organization (Mullins, 2005 ). A good human relationships at work will influence several activities, for instance, the efficiency and performance of staffs, and their commitment to the objectives of the organization.

The Chinese labor market is characterized by a vast pool of poorly qualified personnel, more than 15 percent of the population are illiterate and many university graduates lack marketable skills( Stone, 2010). As China has grown so quickly, the number of qualified managers in China has been unable to keep pace.

On the other hand, quite a number of people cannot according to their own characteristics, hobbies and ideal to choose for the occupation, and enterprise cannot recruit the right people at the moment. More importantly, companies cannot avoid employees jumping ship which will give rise to two-sided damage both to business and individuals on account of the frequent flow of personnel.

4 Situational Analysis of United States

This report discusses the following 3 major areas in the study of People, Organizational & Society:

Organizational Structure

Culture

Human resource management

4.1 Organizational Structure

United States management models are system-oriented, or computer-technology-like relationships with performance measures. Many successful American companies have a dynamic organizational structure (e.g., Google, Microsoft, IBM). These American companies operate in a very fast changing environment where employees are empowered to communicate and get the job done.

Basically, employees are working in a dynamic environment where they have to find creative ways to solve problems and deliver results. Performance reviews provide individual and team measures with incentive and bonus.(Lee. 2011)

4.2 Culture

People in the United States have low power distance, a low power distance culture tends to favor personal responsibility and autonomy. Supervisors and employees are considered almost as equals. People in US prefer teamwork, and would like to involve as many people as possible in decision making (ClearlyCultural, 2009).

American has a high individulism index which means that there is a high valuation on people’s time and their need for freedom, and they tend to put rights and privacy in the first place, however, the society of people tend to overestimate their abilities, overestimate their own importance to any group work(ClearlyCultural, 2009) .

America measures as being a culture that ranks fairly high on the masculinity level. People are very goal-driven and deal-focused in the United States. They also feel strong about independence, individual decision making, decisiveness and being tough. Typically, Americans live to work so that they can earn monetary rewards and attain higher status based on how good one can be (ClearlyCultural, 2009).

United States has a low degree of uncertainty avoidance, people are easier to accept the uncertainty inherent in life, they can accept more opinions, also the authorization of superior to subordinate is carried out more thoroughly, workers tend to independent management and independent work (ClearlyCultural, 2009).

People in the united states have low long term orientation index scores. This suggests that individuals can pretty much expect anything in this culture in terms of creative expression and novel ideas. Moreover, people in the US don't value tradition as much as many others, and are therefore likely to be willing to help individual execute the most innovative plans as long as they get to participate fully (ClearlyCultural, 2009).

4.3 Human resource management

In United States, organizations have been managing the employees by a more competitive, global and deregulated process. Recruiting in the American companies is not only based on the job itself, but also include the test of interpersonal skills and the life enthusiasm, which means that in the process of recruiting, US companies combine the staff’s personal qualities and qualification with the enterprise’s development strategy (Gross, 1998).

In addition, the training program in the US companies is not just like the post skills training, but a premeditated and high pertinency training project which aims to improve employee job skills, most importantly, it aims to develop the personal ability, and to foster the potential high level professionals.

5 Comparative analysis between He Nan vs. United States

As what was analyzed above, there is a clue shows that the organizational structure of He Nan is a top down communication which is a hierarchical structure. Only the top manager can make the decision. The superior has the privilege, all the subordinates can do is to obey the rules and instructions, and they cannot offend authority. However, nobody can assure all the decisions made by the top managers will steer the company to achieve the organizational goals. Companies in the United States motivate staffs to participate in the operation of the firm as well as the decision making within the company.

Regarding to the difference of the culture, after analyzing five culture dimensions, we can obtain a significant difference between He Nan and the United States. US people who are having a low power distance apt to make every employee have an equal right and obligation within the operation of the company, while the high power distance in He Nan indicates a gap exists between managers and employees. Americans are individualism, they value most about the individual right and they are free to present the individual opinion. However, people in He Nan are collectivist who regard the whole team as more important.

While for the masculinity dimension, both of the US and He Nan are within the masculinity culture. People tend to contribute several of vigour and efforts to the work for the sake of a better life. Under an uncertainty avoidance circumstance, companies always design specific regulations to restrict employee performance in He Nan. On the contrary, Americans would like to accept unpredictable elements and are willing to take the challenge for the unforeseen future. The last culture difference is long term orientation, people in He Nan are influenced by the traditional culture, and therefore, they prefer to make a plan before they put into effect. Inversely, Americans do not value tradition as many others, they are willing to innovate and attempt to future things.

There are considerable differences between US human resource management style and Chinese human resource strategies. For instance, US companies pay more attention to constantly motivate employees, and retain the talent by exerting incentive mechanism when comparing with Chinese companies. Human resource management in the United States raises the employee salary and wages to reinforce motivation for employees. People who get into a new position will obtain the same degree of wages while it company will give staff more bonus year after year, but it has a ceiling. Once wages reach the limited, the amount will not increase any more unless the employees achieve a promotion. This kind of incentive method is not common in the Chinese companies.

6 Predictive changes in He Nan for the next ten years

From the previous discussion and comparison, we can predictive the changes in He Nan province in the following ten years.

First of all, the organizational structure will become more open-mind and less hierarchical, employee will have more involvement into the company’s operation, and Managers might present the problem of wanting to make the company more responsive to the market's changing conditions and then use town hall meetings and other methods to get employee input for restructuring the company. The environment within the company will tend to be more employee-orientated, and more dynamic. On the other hand, the organizational structure will become less formalization which means that employees have more rights to decide their own ways of working instead of following the inflexible regulations established by the top managers who might not familiar with the specific situation of the production line (Lee, 2011).

Secondly, as for the culture, Chinese's values ​​and social attitudes become more and more open and diverse, also Chinese people will improve their ability to accept a variety of foreign culture and other subcultures in the next decade (Zhou, 2011). Moreover, based on the five culture dimensions, we can predict that in the next ten years, the power distance in He Nan Company will decrease so as to involve more employees on the decision making. Besides that, companies in He Nan tend to have lower long term orientation which will motivate employees to create more ideas and help the company acquire the innovation.

Thirdly, He Nan’s human resources management and development should be fully absorbed into foreign advanced management methods and means, both the government and enterprises, should strengthen the requirement for human resources management, and broaden the vision of globalization and global competition. Better human resource management should be more flexible and non-adversarial according to actual situation. For employees, make sure each employee is on the best position which reflects their value, and create a safety working condition for staff to arouse their work enthusiasm. Besides that, outsourcing program will be introduced to the companies in He Nan, implementation of outsourcing human resource management will assist the firm to acquire the professional human resource service, and the latest technology information, also can improve the management efficiency within the company.

7 Summary

Within the last fifty years, He Nan has experienced a significant change in the economy as well as the other aspects, for example organizational structure, culture and human resource management. Through the comparison between He Nan and United States, it can be seen that America has advanced management methods, companies in China tend to take the US companies as a benchmark and emulate the progressive technology or methods in order to apply to their specific operation. However, companies should apply advanced experience according to local conditions and should not apply it mechanically.