The success of a firm in China – whether local or foreign – depends predominantly on the managerial qualities and leadership personality of the boss. Varying by region or type of firm, various styles of management with various characteristics are predominant.
Different Styles Of Leadership In China
In today’s China we find typically three styles of management :
- Authoritarian leadership style: Power is with the superior. His instructions are absolute and are carried out by the staff, who do not think about the sense of them or take on responsibility for their actions.
- Paternalistic leadership style: The boss guides the staff in a ›fatherly way‹ as in a family, he is always a role model, but strict and responsible. He is also involved in important private matters of his staff. In return, they are obedient to authority, faithful and loyal.
- Cooperative leadership style: The superior has the position of a somewhat higher placed colleague. Cooperation with the staff is closely agreed upon. Personal initiative, open discussion and suggestions and criticism are desired. The staff members are part of the decision-making process.
(Waldkirch, Karl, Erfolgreiches Personalmanagement in China, 2009, p. 79.)
In the various regions of China different tendencies can be observed as to which managerial style is applied in which form within local companies:
In western and north-east China we predominantly come across authoritarian leadership styles. In south China (also Hongkong and Macao) there is a strong paternalistic style. In the modern industrial centres with many foreign firms, for example on the east coast, all three styles can increasingly be found.
Which leadership style is dominant depends also on the structure of the enterprise (state-owned enterprise or private). State-owned enterprises are mostly run in an authoritarian way, private enterprises are mainly paternalistic. The increasing internationalisation of firms is leading more and more to cooperative managerial styles as well. In traditional branches, we mostly meet the authoritarian leadership style. Those firms are often run by the state and are bureaucratic. Work is done according to strict targets, as in a planned economy. If Chinese partners have a strong influence on the firm, for example in a 100% subsidiary or a joint venture, the Chinese boss will usually lead in a paternalistic way. That is true until today, for example in mechanical engineering and a large part of the automobile industry. But don’t let us forget in this observation that individual managerial styles within firms depend greatly on the personality of the managers there.
If you go to a firm in China as a foreign manager take note of which of the above-mentioned factors you recognise which allow conclusions to be made of the managerial style practised. In cases of doubt, you will always be on the safe side if you assume that a paternalistic or authoritarian leadership style is used. Cooperative managerial styles are very well-known, especially in western countries. So in what follows we want to focus on the role of managers who manage their staff paternalistically, such as we come across in most of the local private firms.
Tasks Of A Manager
In China micro-management is widespread; the manager watches over or monitors the work of his staff very closely. In the work process a superior will regularly check on the progress of a task given and if necessary correct or adapt. To be sure of not making mistakes and not losing face, in these organisations Chinese steer clear of personal initiative and show themselves very passive in the solution of problems. So a superior has to give exact instructions and make sure that these have been understood. He should always be careful not to criticise his staff directly in front of others and to value the saving of face of every individual.
A boss who leads in a traditional way will in addition not lead individuals but teams and promote consultation within groups. He will show recognition of group achievements but not give much stress to individual achievements. He himself always makes the final decision after his staff members within the group have prepared the basis for a decision. So reaching decisions can be a very long process in China.
Against this background of orientation to groups, foreign superiors in managing Chinese staff must especially note that for each worker individual responsibility is not worth striving for. A western working style with the promotion of independence and personal initiative, impatience and open discussions, raising problems and criticising in public and thereby leading to loss of face, is one of the main reasons for failure to succeed and for high friction losses and initial costs in China. You should take note that a cooperative managerial style is often judged to be a weakness if Chinese staff have not been introduced over a lengthy period to this modern style of managing. Many foreign managers in Chinese firms try right from the start to lead in a cooperative manner and introduce corresponding standards – and mostly have painful experiences.
Boundaries Between Manager And Team
The superior who acts paternalistically has to take care not only of business matters but also to a certain degree of important private matters of his staff. It is part of his responsibility to regularly create occasions on which all of the colleagues can build up personal relationships and deepen them. That is done through the arrangement of company outings, sports events within the firm, hiking days, or the provision of houses or flats which the staff can use on weekends or holidays together with colleagues or their families. Such activities contribute to a positive atmosphere in the firm. In return, the staff will invite their boss as an honoured guest to family occasions such as weddings, funerals, or special birthdays.
The many contacts with staff outside work hours can mislead a foreign manager in China to back-slapping behaviour also in daily business. That can be counterproductive. A Chinese staff member may feel honoured by having lunch together with his boss in the canteen. On the other hand that mostly leads to confusion and uncertainty about what behaviour is appropriate. Hence at work, a superior should conduct himself in a corresponding hierarchical way.
Western managers often have difficulties with that boss role and do not realise what value the hierarchical distance on the one hand and the regular team activities, on the other hand, have for the success of a company. If a foreign superior in a paternalistically managed firm tries for a more casual contact with Chinese staff that is mostly interpreted as a weakness of the foreigner. Hence the rapport with the staff can be much more informal after work or at weekend events than in daily business.
Foreigners working in a subsidiary company in China are always observed sceptically. Their behaviour is mostly automatically viewed through a ›Chinese prism‹ and interpreted according to patterns and standards of behaviour they have learned. Chinese constantly expect new and mostly negative conduct in a foreigner. That unpredictability leads to them withdrawing and reacting at first with a wait-and-see attitude. The more a foreigner knows and applies the Chinese rules and manners, the better his acceptance. But foreigners should not become ›Chinese‹. They should remain authentic but respect the local rules and if necessary apply them to achieve a goal. We all know the proverb ›when in Rome do as the Romans do!‹
Intercultural conflicts or misunderstandings between a foreign manager and Chinese staff arise regularly through a lack of knowledge or of appreciation of the various customs. That is true of both sides. Above all, direct communication and criticism of Chinese staff quickly lead to loss of face and are therefore among the main causes of intercultural conflicts
But conflicts with Chinese are for foreigners often not recognisable as conflicts but become perceptible through indirectly noticeable changes in conduct. All sorts of problems can suddenly arise in daily business but you will have to wait for a long time to get open signals of a rising conflict. When problems or conflicts arise it is therefore always advisable to use the personal relationship so as to lead the work relationship once more onto the right path through flexibility and understanding of the situation of the other side. Praise and appreciate the work achieved to date and try personal conversation. A boisterous evening with a lot of ›harmonising‹ alcohol has defused many a conflict or placed it in a different light.
Recruiting Qualified Staff
While in recent years it were primarily foreign firms that could pay the relatively high salaries and wages for qualified staff, today Chinese employers are also increasingly struggling to attract high-potential employees.
To put it another way, well-trained staff often have the choice between many possible workplaces. So for foreign firms, the search for personnel is one of the main challenges in China. And it is not rare that they have no other course than to invest in further training or pay higher wages.
The usual ways of searching for staff in China are participating in job fairs, direct recruiting at universities, personal recommendations and placing ads, e.g., in online job portals, at least when searching for staff at the lower or middle ranks on the hierarchy. But you must be prepared for the fact that if you advertise jobs online soon hundreds of applications come in and have to be evaluated. To limit the number of candidates you should place only precise job descriptions with important details in your advertising for staff.
For recruiting new managers and directors, placing advertisements is not a suitable path, since most of the innumerable candidates that can be expected have been dismissed by their former employer or do not have the desired qualifications. For the search of more suitable managers, it is recommended to have recourse to experienced executive search services even if they have their price. It is imperative to be sure that Chinese criteria of success that are suited to your firm are given priority.
Criteria For Choosing
In the procedure of putting on staff in China with a flood of applicants, experience shows that the CV’s sent in by the candidates are often very similar, and together with the various testimonials, certificates, and references contain few relevant facts for foreigners. As a consequence, it is advisable to call on local staff or personnel specialists so they may be able to let their Chinese impressions and criteria play a role in the judgment of the candidates.
It is good to know that unfortunately there are manifold possibilities of acquiring falsified certificates, university degrees, references and other documents. Especially western firms fall for that again and again. So it is necessary to verify the relevant information and documents handed in by the candidates in advance. Ask Chinese colleagues, ring former employers, and have important information confirmed. Investigators have meanwhile discovered this market, and are on the trail of applicants with falsified papers.
With regard to the criteria for choosing, you should note that in the Chinese educational system people are taught to learn and obey laws and rules. People do not ask questions. So there is a lack of competence in solving problems and independent thinking. However, that is just what many foreign managers want – and most Chinese applicants do not have. Independence and creativity contradict Confucian values and have to be developed and cultivated only carefully and over a long period in modern firms. In keeping with that, specialised knowledge, personality and ability to integrate into a team play a greater role in China.
But be careful of ›job hoppers‹ who list in their CV several jobs over a short period of time. Will you be able to retain them?
If you want to rely on recommendations take note that in China a recommendation has little to do with a guarantee of the recommender for the ›quality‹ of the new employee. It is only a sign that within the guanxi network (see more on that in Recognising cultural differences) there is a person who the recommender wants to do a favour. Frequently it is a case of a close or distant relative.
Take plenty of time for job interviews. And carry out many interviews. First impressions, especially in English, can deceive. You would too quickly hire staff according to criteria, which do not function in the Chinese context. Chinese staff members can often gain a better impression of the candidates.
Since Chinese often lack English skills it has turned out again and again that that knowledge is too highly evaluated in its significance and professional qualifications take a back seat. Often experienced technicians speak no English, while younger English-speaking Chinese have scarcely any professional experience. Would you hire somebody in your company in your country primarily because you can understand him linguistically in a job interview? Hardly!
Reducing Staff Turnover
The training of professional and managerial staff in China cannot keep pace with the enormous economic growth, and so the competition for qualified staff is very hot. As a consequence, the turnover of staff in foreign subsidiaries in China is one of the world’s highest. So for an employer, it is imperative to win those desired staff members over, retain them, and not lose them to the competitors. So it is easy to understand that staff should be well treated and motivated in the Chinese sense. Offer in an environment of constantly rising wages a balanced, competitive salary package including additional benefits – financial contributions to insurance premiums, grants for training or the education of children, support in getting accommodation, etc. However, monetary incentives mostly do not suffice to keep staff. Further motivational factors in China are:
- Regular further training
- A harmonious work atmosphere, in which Chinese saving of face has high value
- The exemplary function of the superior: a figure to identify with and a fatherly caretaker, also in private problems of his staff
- Regular checkups, recognition and praise
- Active integration in the staff team
- Free time events for the staff (e.g., table tennis competitions, yearly excursions, etc.) that increase the feeling of togetherness.
Chinese staff members practise less self-monitoring than, for example, Germans. Instead, they are regularly checked on by their superiors. The more important the task of a staff member, the stricter the check on his work. It is hard for us to understand, but regular checking by the boss isn’t felt as negative but considered positive and motivating. But direct confrontation with mistakes or lapses in the presence of others is equivalent to an insult. Supposedly unimportant utterances can quickly lead to loss of face and a corresponding demotivation. In that case, ›intercultural tact‹ is called for.
Further, you should be aware that the quality of the cooperation depends on the quality of Chinese or foreign managers. Anyone experienced in Asia knows of examples in which through a change of managers the staff turnover was significantly raised or reduced. The relationships between people are of great importance for business success in China.
In choosing their managers, foreign firms, again and again, experience bad choices and the consequences of that: successful assertive managers or bosses in other countries are in China often incapable of ›pulling along‹ their team or of motivating them, and so the staff look for better working conditions in another firm.
As well as that, Chinese educated in the west are often hired with high expectations as managers. Since they a
re very well paid even without any professional experience worth mentioning, they are not accepted by their more experienced Chinese colleagues, and as a result, many no longer want to cooperate or leave the firm.
So you have, in appointing managers, to make compromises in any case and find an appropriate solution for the firm involved. In addition, be generally ›generous‹ in your personnel planning and, if the case demands it, hire more staff than you need for one position. Because of the high staff turnover, it is very likely that after qualification training one or the other staff member – despite your efforts as a good employer – switches to a new firm with the newly acquired qualification.
Extract from Business Culture China, Courtesy of CONBOOK Verlag