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JKIC
2,2 Education and human resources
management in high-tech
organisations in China
186
Serena Rovai
Uni-Italia Centre (Academic Innovation and Development in China),
Italian Embassy, Beijing, China and
Grenoble Ecole de Managament, Grenoble, France
Abstract
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Purpose – At present, in the increasingly global markets, one of the main challenges to international
business is how to effectively manage human resources across cultural boundaries. In particular,
high-tech MNCs demand a specific pool of talented individuals with specific technical expertise and
personal skills to be adapted to operate in an international arena. That is especially true in the case of
China, which has attracted a significant variety of foreign investments from diverse countries and
whose people management policies and managerial staff technical and personal skills are reported in
some cases to be at a primary stage. The purpose of this paper is to explore the educational context
development in China and its related influence on the recruitment and selection process in Western
high-tech MNCs in the People’s Republic of China (PRC).
Design/methodology/approach – This is a research paper based on multiple case studies and
direct face-to-face interviews.
Findings – China needs highly trained and highly educated individuals who can work in a dynamic
domestic and global marketplace. Under the centrally planned system, the curricula in different
universities are not associated to diversification in response to China changing economic needs and
scenario. In most of the Chinese universities, many of the disciplines are very narrowly defined
because these institutions are responsible for the job assignment of graduates. Despite the
unprecedented growth of Chinese higher education thanks to the recent government reforms, the
educational system in China still needs to be further restructured in its curricula to provide a sufficient
number of qualified managers but however it will take time.
Originality/value – Nowadays, China needs highly trained and highly educated talents who can
work in a domestic highly globalised marketplace. The underlying study will provide insight into
those education related factors and their impact on the labour market in China with a specific focus on
the search for appropriate technomanagement talents. The paper also provides insights into those
educational factors, which produce satisfactory and less-satisfactory results in recruitment of local
talents in foreign technology companies. It also suggests the need for further research in the talent
management area and education in PRC in relation to the current lack of data. Recommendations for
the possible integration of appropriate educational projects aiming at developing highly talented
individuals into those foreign corporations are provided.
Keywords Selection, International business, Education, China, Human resource management
Paper type Research paper
Introduction
Journal of Knowledge-based Foreign MNCs perceive China as one of the main opportunities to grow using existing
Innovation in China high-tech products, despite the fact that company profit and performance are often
Vol. 2 No. 2, 2010
pp. 186-198 questionable. In fact, after that China officially signed the WTO agreement in
q Emerald Group Publishing Limited
1756-1418
November 2001, it has often been regarded as a golden opportunity for foreign firms to
DOI 10.1108/17561411011054814 invest in the future “factory of the world” (Yeung and Mok, 2003). However, there is
a significant amount of data showing that companies operating in China may not live Education and
up to their performance aspirations at the start of their activities (Schlevogt, 2002). human resources
The imbalance between market potential and realised profits seem to be associated
with the fact that executives did not clearly perceive the success factors in China and management
the critical core competencies. This due to their lack of evaluation of the importance
associated with the local context-related factors affecting business and people
management. 187
Until recently, China has been relatively isolated from the influence of Western
management practices and there has not been in China a comparable parallel
development of people management policies as in the West (Warner, 1998). The current
situation in Mainland China requires that a specific attention should be paid to those
context-related factors and amongst those a more specific attention has to be paid to
the educational context and how it may affect effective recruitment and selection of
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end of 2010 however, with a direct total government expenditure on education limited
only to 3 per cent of national GDP and consequently with education funding based on a
new commercialisation strategy of the higher education system (MOE, 2007).
In the old China of 45 years ago, the great majority of people were denied the right to
education. Recently, an estimated 15 per cent of the population is illiterate, compared
with 80 per cent in the past. While the recent advances in education may be
exaggerated, the claim that illiteracy has been virtually wiped out in the major cities
may well be true. China now has more than 1,000 colleges and universities and is
adding more at a rapid rate. Despite statistics showing Chinese adults’ literacy rate at
82.9 per cent and secondary education enrolment ratio as high as 70 per cent,
university enrolment ratio is reported to be at 5.7 per cent. Furthermore, according to
China-related statistics, only 3.5 per cent of the population have a college degree and
only less than 2 per cent of the entire population has completed post-secondary or
higher education (EIU, 1999).
China needs highly trained and highly educated individuals who can work in a
dynamic domestic and global marketplace. Under the centrally planned system, the
curricula in different universities were not associated to diversification in response to
China changing economic needs and scenario. In most of the Chinese universities,
many of the disciplines were very narrowly defined because these institutions were
responsible for the job-assignment of graduates. At present, the situation is changing
and a broadening of the curricula and phase out of the job assignment system has
taken place (Surowski, 2001). However, this old approach has left too specifics subject
matter minutia negatively affecting originality and diversity of those subjects
(Hin, 1998). In particular, as China started its transformation to a market economy only
in the 1990s, modern-conceived education – specifically in the business sector – it is
very much in its infancy state (Kleinmann and Lu, 2005).
The increasingly fast development of the higher education system has totally
changed the national higher education system from an elitist to a mass one.
The remarkable growth of enrolment rate would not occur if higher education reforms
had not been introduced by the government. Those reforms have integrated
commercialisation, decentralisation of higher education control and expansion of
enrolment. In the perspective of attempting to achieve a certain calibre of preparation
in the local workforce, the Chinese Government has planned to attract input and
resources from top-level foreign educational institutions to overcome the problem.
However, different sorts of challenges have taken place due to the reluctance of foreign Education and
institutions to participate without the ability to ensure the integrity of their programs, human resources
to protect their copyrighted materials, and to make a profit (Cremer, 2006; Wu and
Zheng, 2008). management
Despite the issues arising from the educational problem, it should be noticed that
the government attitude demonstrates awareness and at least represents a positive
step forward compared with the recent past. In fact, despite clear signs of the low 189
quality of labour during the last few years, the government believed that the bottleneck
in raising the quality of its people lay in funding. Although this increase in funding
failed to produce a fast short-term improvement, it nonetheless confirmed that it is
better to promote quality improvement initiatives through human resource systems
and practices. As a result, the government promulgated a certain number of laws in
order to liberalise the market and this change allowed foreign invested enterprises
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Methodology
The methodology used was multiple case studies – three case studies for comparative
purposes – from multinational corporations from three different technology sectors.
The first company chosen was a French multinational specialised in the manufacturing
of high-tech fibres and in particular focusing on their R&D laboratories recruitment of
local talents. The second company involved was one of the main corporations in
aeronautic industry and the last one considered as a source for our empirical data was
a main player from the pharmaceutical sector. All of them are based in Beijing where
their corporate headquarters are and some of them have also branch offices or R&D
centres in coastal and western provinces of China.
Data collection was mainly based on interviews with top management and human
resource management (HRM) staff and direct observation of the selection process as
well as HRM written documents consultation. Those documents were both supplied by
the company and collected from public sources. The data-collection process included
multiple interviews as well as spontaneous conversations with company current
employees and those were conducted from November 2005 to January 2006. Interviews
with representatives from Chinese academic institutions and from the Ministry of
Education provided relevant informants to have specific empirical data about the
education development in China. The open-ended nature of interviews allowed
integrating into our expected findings further data from local informants according to
the explorative approach. The interviews were being face-to-face and conducted in
English. The interviews covered their talent pool situation and their recruitment
context in China.
technical expertise in the specific industry and international mindset were considered
to be critical as evidenced by Sino-Euro Airplanes Head of Corporate Business Unit:
Hiring the best talents “with high technical intellectual capabilities and strong leadership
skills and highly promoting a career-development oriented approach” in order to maximise
employee capability and growth as well as to align them to the company culture and business
goals.
As Ms Yang HR Manager from Sino-French Techno-systems Laboratories confirmed
that:
It is central to recruit local staff [. . .] localisation was argued to be the latest buzzword in
China. Until a few years ago, the local talent pool was not sufficiently good in China, and
hence expatriates were in great demand [. . .] Despite the local talent has grown quickly and
on certain positions today companies are capable of replacing expatriates in some technical
positions, there are still issues of concern in identifying local talents possessing both technical
k knowledge and management skills due to not adequate preparation from education.
Ms Yang evidenced that today, there are local candidates with ten years work
experience of Western companies and there is a higher level of language knowledge
and initiative taking. Recent graduates are also more open than ten years ago, and have
a better understanding of the international environment. However, coaching and
mentoring seems to be still greatly needed since the education system does not
emphasise teamwork or initiative taking and newcomers often need training to be
aligned with company cultural values – divergent from national once – and effectively
contribute to team work especially in research laboratories. Consequently, only using
local staff could be risky. In fact, some of our respondents evidenced the negative result
achieved by those foreign MNCs, which have chosen to replace all their expatriates
with local managers for cost issues. Sino-Airplanes HRD evidenced that:
Expatriates are still needed as a “trait d’union” between headquaters and the branch office in
China. Expatriates have the specific task to coach and mentor as well as to “infuse” company
corporate values and organisational practice to those local Chinese managers with excellent
market knowledge in the field and technical competencies [. . .]
Sino-Euro Airplanes HR Manager and Sino-French Techno-Systems Laboratories HRD
evidenced that only a few universities with excellence in the company-specific technical
sector might provide potentially suitable candidates and most of them from coastal area.
As a result, recruitment of young talents does not cover the whole territory but Education and
strategically focus on a maximum of five or six universities from the most developed human resources
coastal areas, causing specific concern for their branch offices in Western provinces.
Consequently, representatives from all of our three companies evidenced their management
company’s decision to be involved in the development of academic programmes as
Ms Yang reported:
Campus networking activities and partnerships with academic institutions are very useful, 193
also in relation to the company involvement in designing and updating specific educational
programmes for company and labour market needs.
Confirming this trend, at the moment Sino-Euro Airplane is developing close tights
with top Beijing universities specialised in business and economics or in the fields of
engineering and airplane technology in order to have access to the candidates with the
potentials most suited for their industrial sector.
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However, some difficulties were also mentioned when referring to the involvement
of education institutions and organisations in recruitment policies and practices. In fact,
Sino-Euro Pharma HR Country Manager stressed the fact that:
The educational system in China needs to be reformed to provide a sufficient number of
qualified managers, but that this is likely to take time.
Currently, the educational system is reputed to not provide an effective business and
management preparation with an international orientation and structured to “develop”
individuals with the skills required to operate in a global environment – as evidenced
by the HR Manager from Sino-Euro Airplanes.
In fact, our key informants from all of our case companies evidenced that they still
rely on foreign universities with joint-programmes in China or definitely for their
programmes abroad targeting returnees and overseas Chinese despite the fact that
\some of them may no longer have appropriate knowledge of the business market
because of the fast changing Chinese market.
In relation to this scenario and related concerns and challenges for graduate
recruitment, Sino-French Techno System Laboratories Recruitment Advisor confirmed
that they have implemented a training system specifically devoted to develop recent
graduates’ management skills such as team working and corporate company culture.
As evidenced by Ms Lv, Recruitment Manager from Sino-Euro Pharma, graduates who
have joined the company after receiving “induction training” – aimed at getting them
inside company values and working environment – have the opportunity to join a
certain number of “training days” in some specific technical or managerial areas where
they have been assessed to be more in need.
Of course, challenges are still part of this context. While the fast development of China
higher education institutions have remarkably improved access to higher education,
however there are still challenging concerns facing the Chinese Government, foreign
Higher Education providers, foreign multinational, and the whole academic
community. Our informants have highlighted the increase of graduate
unemployment in internal regions, important differences in higher education quality
provided in the coastal areas and in the western ones and the difficulty in transferring
personnel amongst regions. Those challenges cause increasing concerns specifically
for foreign high-tech organisations looking for the most suitable and talented
candidates with a specific knowledge of the local market, an international mindset and
excellent technical skills in both coastal and non-coastal areas.
This context has evidenced how Higher Education expansion can and will play a Education and
unique role in making China’s development sustainable and providing adequate human resources
human resources to the internationalising local market.
Chinese economic transformation, the growing presence of foreign technology management
companies, and the attraction of foreign investments had exotic appeal for practitioners
and academics alike. The time has come for more attention to transforming academic
institutions that can develop and sustain the movement of ideas into practice – one 195
being higher education.
This paper has merely reported cursory information and highlighted the
educational development in China vs technology foreign corporation’s recruitment
approach. More research and more collaboration are obviously needed. Hopefully,
the issues summarized above will raise both the awareness and the energy to accelerate
this evolution.
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