Dennis Damer, BBA 2 MCD Term Paper 1/11
MCD Term Paper
Summer semester 2002
By: Dennis Damer, BBA2
Type: Research Paper
Word Count: 1683 (main text)

Dennis Damer, BBA 2 MCD Term Paper 2/11
Content
Table of Contents
Introduction
Intercultural Dimensions – Definitions
Main Influences on Cultures
 Chinese Culture
 Japanese Culture
 German Culture
Issues in HRM in Chian
 The Recruitment Process
 Education and Training
 Motivation and Remuneration
Conclusion
Bibliography
Notes
Page
5
6
7
4
3
2
3

Dennis Damer, BBA 2 MCD Term Paper 3/11
Venturing into China is a formidable challenge for almost every foreign company. The entry into the Chinese market offers cheap labour as well as access to 1.3 billion potential customers 1 as China advances economically.
Nowadays Human Resource Management is of vital importance to the majority of companies.
Even though companies might not shift their core business functions such as R&D to China or only use it as a cheap manufacturing base, success and failure are to a large extent determined by whether one is capable of handling the local work force.
As will be shown later, Japanese and European companies widely differ in the ways they manage their Chinese employees. The Japanese approach is worth an examination as Sino
– Japanese companies operate very successfully and Japanese managers enjoy a reputation for being interculturally sensitive 2 . Still, there are voices describing Japanese as overly xenophobic and cautious in international business only outsourcing functions which allow for a quick recovery of capital 3 .
It needs to be said that the statements given by the author and the ones referred to should be seen as vague, general tendencies and not as undisputable facts. They may apply to most members of a culture to some degree but not to each and every individual.
In the following paragraph I will explain the intercultural dimensions occurring in the paper. It needs to be clarified that not all aspects of the single dimensions will apply a hundred per cent to the cultures discussed. Especially the Chinese culture is developing dynamically 4 and might sometimes show seemingly contradictory characteristics.
Collectivism vs. Individualism 5

Group valued higher than the individual

Individual achievement

Group responsibility

Group harmony

Qualifications valued higher than
relationships



Quality of life
Family orientation
Job satisfaction
Femininity vs. Masculinity 6

Achievement/ career orientation

Personal advancement

Dennis Damer, BBA 2 MCD Term Paper 4/11



High vs. Low Power Distance 7
Authority based on position/ status
Hardly any disagreement with superiors
Top
– down decision – making

Authority based on professional
knowledge

Subordinates involved in decisions

Bottom
– up decision making
High vs. Low Uncertainty Avoidance 8

Formal rules

Career security

Ambiguity felt as threatening

High mobility

Willingness to take risks

Appreciation of performance related pay
Diffuse vs. Specific Orientation 9

Mixing of job and private life

Many casual friends

Working and private life kept separate

Few but close friends
Chinese Culture
Chinese Confucianism is one of the main influences on Chinese culture. It stresses theoretical learning and the importance of unequal relationships for social stability 10 .
Therefore, a strong sense of hierarchy exists in the Chinese culture. For the Chinese the family is the most important part of the society. Collectivistic within their families, the society in general can be described as rather individualistic and shaped by a materialistic value system 11 . Still, perceptions vary as to how materialistically oriented Chinese are, as will be shown later. Communism has only achieved to artificially surpress these tendencies for a short period of time. Due to the social insecurities prevalent and changes during communism the trend towards a low
– trust society has been reinforced 12 .
The art of guanxie and the importance of relationships is another important trait which has developed as a result of legal and political insecurity and arbitrariness over centuries 13 .

Dennis Damer, BBA 2 MCD Term Paper 5/11
Japanese Culture
The Japanese culture is determined to a large extent by Japanese Confucianism. In contrast to the Chinese Confucianism it places more emphasis on loyalty, approves of business and trade and is one reason for the Japanese preference of practical learning 14 . Together with peasant values and the will and tradition to live to work, a unique work ethic has developed.
The Japanese culture sees willingness to learn as a virtue (from books as well as from foreigners) 15 .
Often, the Japanese society is referred to as a “block of granite” because of its highly collectivistic nature 16 .
Both the Chinese and the Japanese culture are rather particularistic and lack systems of absolute and universally applicable rules. They usually approach each other with caution due to the historical difficulties 17,18 . Their attitude towards foreigners is rather ambivalent and often reflects their mistrust. Especially the Japanese tend to be cautious in international cooperations 19 .
Swiss - German Culture
The Swiss-German culture is based upon a rational and logical thinking model. Owing to the protestant and Calvinist influences the culture enjoys a distinct work ethic 20 .
The society is individualistic and materialistically oriented, even though self-actualization has become important at the work place. Decisions are usually made democratically, though not always taking into account the will of the minority.
Private and public space is usually kept separate showing their specific orientation 21 .
Universally applicable rules are assumed and a high degree of importance is placed on written instructions, contracts and rules 22 .

Dennis Damer, BBA 2 MCD Term Paper 6/11
I will now concentrate on important aspects of Human Resource Management. First I will examine how firms recruit their employees and their expectations towards these. Often, education is needed to better integrate Chinese employees into the work place and to enhance their qualification. The second part will therefore scrutinize education and training concepts. Conclusively, different approaches of remuneration and motivation will be looked at and their effects compared.
The Recruitment Process
Recruitment is nowadays not usually carried out by guanxie any more as far as European and Japanese companies are concerned. The most important channels are 23 :

Local labour bureaus

Ads to attract local workers

Talent fairs
Firms establish direct contact with university graduates and seek to attract Chinese
“high potentials”

Co-operations with universities and offering of internship opportunities

Headhunters
Though not yet commonplace in China, headhunting is a popular tool to find local candidates for top management positions
CVs and school reports are usually vague, difficult to verify and often overly positive 24 . Most firms have therefore opted for a sophisticated application procedure. Written test are conducted to assess a prospective employee’s general education and English skills. In
Japanese companies and joint ventures in China written tests play a larger role than in
European ones and tend to be more extensive in general 25 .
European companies conduct multiple interviews with the applicant. Up to three interviews take place, compared with usually one in Japanese companies. This exemplifies the different priorities in recruitment. Japanese companies generally care less about an employee’s attitude towards work and focus more on professional knowledge 26 .

Dennis Damer, BBA 2 MCD Term Paper 7/11
European companies on the other hand regard the personality of a future local employee as the main criterion for hiring 27 .
Education and Training
Especially the Japanese view the education standards in China as highly inferior and as a major obstacle to business. This contrasts with the view of Robert A: Theleen, chairman of
China Vest, the oldest established venture capital firm in Greater China who praises the
Chinese institutions of higher learning and states that China has already more engineering undergraduates than Western Europe 28 . Even though, his statement might not refer to semi- or unskilled labour.
To improve the managerial and technical record of its workforce European and Japanese companies take different approaches. The European companies prefer local facilities to train their workers. They have made the experience that overseas training is costly and that a substantial number of employees looks for a new employer after having undergone overseas training. The defensive attitude of older employees towards further education often frustrates
European businesses 29 .
Japanese employers administer technical education locally but send a much larger number of employees to Japan. The training in Japan aims at indoctrinating the Chinese employees with company values and philosophy as well as Japanese work ethic 30 . One reasons might be that Japan is simply geographically closer to China. Often Japanese companies believe that some competencies cannot be developed outside their home country. Overseas training in form of cultural indoctrination is carried out for Chinese employees of those other nationalities as well. Therefore Japanese companies seem to have a ready – made infrastructure for such measures 31 . The number of employees leaving the company after overseas training is considerably lower than in European companies 32 .
Concepts popular in Japan such as job rotation or team work are not suited to the majority of
Chinese employees who prefer to specialize and work on an individual basis. The Chinese preference to work individually exemplifies their individualistic orientation 33 .

Dennis Damer, BBA 2 MCD Term Paper 8/11
Motivation and Remuneration
Japanese companies are known for fostering a unique relationship between workforce and company. Ideally, the worker is rewarded with life – time employment, though this has begun to change in the 1990s due to economic reasons 34 . Good human relations and a strong sense of group responsibility usually serve as the main motivators in Japanese companies.
Operating in China, Japanese often perceive the Chinese as ranking low on Maslow’s pyramid of needs and therefore concentrate mainly on material incentives to motivate the local workforce 35 . Differences in payment are considerably larger, more performance
– oriented than in European companies and average at 29% with similarly qualified employees.
The European companies, mainly motivating its staff through the prospect of financial rewards and personal achievement, take a different approach. Differences in salary are lower to ensure a harmonious climate. They offer promotions, status, prestige and good career opportunities including the possibility of self
– actualisation to local employees 36 . In the
European view, the Chinese have already begun to move towards a stronger femininity orientation than is perceived by Japanese companies.
One effect of these different policies is obvious in the composition of the work forces.
Japanese companies in their majority attract mainly younger Chinese and have a higher rate of personnel turnover than their European counterparts (25 to 35 years and 3 – 5% to 5 –
15%) 37 . This composition provides evidence of the Japanese preference for employees not heavily influenced by communism and also indicates that young Chinese employees have a lower uncertainty avoidance than their older peers.
The most striking difference between these HRM approaches seems to be the reversal of roles taking place in China. European companies place their bets on self – acutalization and
Theory Y 38 management practices. Japanese companies harbour a certain mistrust towards their employees and therefore are more Theory X oriented. Theory X is applied by managers who mistrust their workers and place them under constant control. Theory Y implies trust in employees and allows them more freedom to take own decisions.
The weariness Japanese feel in international business appears to be amplified by the continuing uncertainties and changes within Chinese society. Also they lack their home

Dennis Damer, BBA 2 MCD Term Paper 9/11 society’s rules to offer guidance and provide a framework for conducting business. This might be a reason for their concentration on hard, gtangible facts in HRM and reflects their strong uncertainty avoidance.
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Dennis Damer, BBA 2 MCD Term Paper 10/11
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Dennis Damer, BBA 2 MCD Term Paper 11/11
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