University of Limerick Limerick, Ireland June 29, 2012 Framing Research Institutional Effectson the Central Organization Department of the on Chinese Executives Chinese Performance Management and IFSAM 11 th World Congress Management Re-imagined

University of Limerick Limerick, Ireland June 29, 2012 IFSAM 11 th World Congress Management Re-imagined

“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 v v

Chinese society values complex competencies cultural functional product

Chinese society values complex competencies The COD’s role in accepting implicit performance management processes is unknown. cultural functional product

Chinese society values complex competencies The COD’s role in accepting implicit performance management processes is unknown. How widespread is the impact of COD on “private sector” MNE performance management processes in China? cultural functional product

Competencies as Strategically Linked Engle, Mendenhall, Powers and Stedham (2001) Cultural Competencies Functional Competencies Product Competencies

It is difficult to measure 1.Courage 2.Curiosity 3.Compassion Instead, we measure these competencies:

Cultural

Functional

Cultural Functional Product

But … Cultural

Chinese cultural competence has 3 parts: Cultural

Traditional Confucian Values “Ti” – substance or essence

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

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

Understanding modern business functions: Marketing Production Distribution HRM “Yong” – function or utility Self-strengthening efforts of the 19 th century during the ill-fated “Tonzhi Restoration” Functional

Understanding products on a micro level Understanding products on a more macro level (industry) Product

Conflict 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 Systems Engle, Dowling & Festing (2006) Inputs Process Outputs Person Job Production Globally Standardized Locally Customized

In November of 2004 the top executives of China Mobile, China Unicom, and China 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?

More public annual review of party personnel Professional merit and moral integrity Professional achievements Acceptance by the masses Regional gross domestic product

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

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

Cooke (2008) distinguishes between: Enterprise Workers Government Officials and Civil Servants Which system applies to Chinese executives?

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?

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?

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

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.

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 by implicit, person, or process based models, rather than the explicit, objective outcome-based models prescribed by U.S. experts

University of Limerick Limerick, Ireland June 29, 2012 IFSAM 11 th World Congress Management Re-imagined Presentation by Ron YoderRon Yoder