Team Project

1
Team Project Comparing Hong Kong and U.S.A. HRMS
By Fang Yuan Kai Chi Huang Chi Young
Hwang April 29th 2003 Managing the Global Workfo
rce Professor Randall S. Schuler
2
Overview

• Hong Kong
• IMD ranking 9 (2002) 6(2001)
• Unemployment rate 5.2 (2001)
• GDP - per capita purchasing power parity -
  25,000
  
• Inflation rate (consumer prices) -1.6
• GDP - real growth rate 0
• Industries textiles, clothing, tourism, banking,
  shipping, electronics, plastics, professional
  services, trade services
  
• Industrial production growth rate -9 (2001
  est.)

• The United States
• IMD ranking 1(2002) 1(2001)
• Unemployment rate 5 (2002)
• GDP - per capita purchasing power parity -
  36,300
  
• Inflation rate (consumer prices) 2.8
• GDP - real growth rate 0.3
• Industries leading industrial power in the
  world, highly diversified and technologically
  advanced petroleum, steel, motor vehicles,
  aerospace, telecommunications, chemicals,
  electronics, food processing, consumer goods,
  lumber, mining
• Industrial production growth rate -3.7 (2001
  est.)
  

3
External factors Culture

Culture Dimension Scores   PD Power Distance
ID Individualism MA Masculinity
UA Uncertainty Avoidance LT Long Term
Orientation
4
External factors Culture values

• Hong Kong
•    - less equal in relationship, high power
  distance
  
• -   more collectivistic
• -   display thrift and perseverance
• - behave less ethically under conflict
  situation
  
• - seek rules appropriate to a situation
• - lowtrust societies strongly familistic
  society
  
• - attend more broadly,
• perceive holistic multi-causality

• USA
•  - more equal relationshipslow power
  distance
  
• -    more individualistic
• -    display personal steadiness
• - behave more ethically under conflict
  situation
  
• - prefer abstract universal principles
  
  
• - more interpersonal trust, less
  familistic
  
• - pay attention to the focal object, focus is
  on
  
• logical connections and on linear and
  
  
• sequential explanations

Unique Chinese Culture values
- Face plays a particularly important role
in Chinese culture - Guan Xi The best Engl
ish word for it is probably connection.
- Harmony, Confucian philosophy emphasizes
middle way is a social ideal of moderation.
- Yin Yang, principle of Taoism thinking,
emphasizes merging opposite elements into a
unified harmony.
5
External factors The Competitive Advantage of
Nations

• Hong Kong
• IMD ranking 9 (2002) 6(2001)
• 1. the world's freest economies
• 2. low taxes
• corporate profits tax 16,
• salaries tax 15,
• 3. an unrivalled regional location,
• the highest concentration of regional
  headquarters in Asia
  
• 4. a skilled workforce
• 5. clean government
• 6. world class infrastructure
• 7. the free flow of information
• 8. government policy of non-interventionism
• 9. the rule of law

• The United States
• IMD ranking 1(2002) 1(2001)
• 1. the leading national exporters
• 2. the top business services
• 3. world leadership in many sophisticated
  industries
  
• 4. the vast amount of arable land and reserves
  of natural deposits
  
• 5. the highest productivity rate of workforce
• 6. strong infrastructure supporting business
• 7. basic scientific research and RD Dept.
• 8. less government intervention in market
• 9. highest economic-stability
• 10. the power of unions is relatively less

6
External factors Labor market

• Hong Kong
• Ethnic groups Chinese 95, other 5
• Literacy definition age 15 and over has ever
  attended school total population 92.2 male
  96 female 88.2 (1996 est.)
  
• Labor force 3.44 million (2001 est.)
• Brain drain resulting from the takeover of HK
  by the Peoples Republic of China in 1997
  
• Unemployment rate 5.2 (2001 est.)

• The United States
• Ethnic groups white 77.1, black 12.9, Asian
  4.2, Amerindian and Alaska native 1.5, native
  Hawaiian and other Pacific islander 0.3, other
  4 (2000)  
• Literacy definition age 15 and over can read
  and write male 97 female 97 (1979 est.)
  total population 97
  
• Labor force 141.8 million (includes unemployed)
  (2002)
  
• Unemployment rate 5 (2002)

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Labor cost comparisons

TOTAL BILLING RATE(/HR)
 
8
The cross-nation comparion of the price of
hamburgers
 
9
Cross-City comparison of housing costs
 
( four people family,1999)
 
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Internal factors Assumptions about people

• Hong Kong
• Li - Wealth Ethic. More emphasis on material
  values, based on the human need for security in a
  potentially threatening environment.
  
• Ming - Admiring the reputation in public or
  organization
  
• - Harmony needed, and loyalty is looked as a
  personal moral character by society.

• the United States
• Wealth is also important, but it is looked as the
  success of individuals.
  
• More emphasis on equity.
• Creativity is encouraged by society.

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Internal factors workforce

• The United States
• -- highest productivity rate of the
  world
  
• 1. Higher education rate
• 2. Higher diversity
• 3. Highest productivity rate of the world
• 4. High skilled workers coming from all over
  the world
  

• Hong Kong
• -- high quality skills and experience
  
  
• 1. multi-lingual ability
• English Cantonese Mandarin
• 2. strong educational standards
• - nine years of free compulsory education
• - government-supported adult and workforce
  education programs (Continuing Education Fund)
  
• 3. high special skills finance, logistics,
  e.g.
  
• 4. acceptance of foreign business practices and
  cultures and ethical standards
  
• 5. western experience in global firms

12
Internal factors Vision, mission and values of
the firm

• Hong Kong
• --Implicit Objectives
• The boss does not normally keep his opinions
  open.
  
• The subordinates are constantly trying to guess
  the thoughts of the leader.

• The United States
• --explicit objectives  
• The organizations vision, goal, long-term
  objectives and performance assessment criteria
  tend to be transparent.
  
• Employees are pleased to share the norms, values
  and experiences

13
Internal factors Organization Structure

• Hong Kong
• -- Underdeveloped structure
• Work responsibilities are poorly
• defined,
• Standard procedures are not
• common
• Staff and line units are
• undifferentiated

• The United States
• -- Developed structure
• Work responsibilities are defined
• in job descriptions
• Standard procedures
• Staff and line units are clearly
• differentiated

14
Internal factors Nature of ownership and
Management

• Hong Kong
• Most of Chinese firms are small size and
  family-owned
  
• centralized decision-making and control systems
• loose organizational structures
• paternalistic and autocratic managerial styles
• nepotistic succession processes
• intuitive planning
• personalized linkages with the external
  environment
  

• The United States
• Most of firms are partnership(private)
• Less centralized or decentralized-making and
  control systems
  
• Tight organizational structure
• Democratic and collective decision and managerial
  style
  
• Rational planning
• Credit systems linkages each other in the society

15
Hong Kong
United States
Work System
Craft production Try to introduce lean producti
on system
Toward the lean production system in recent years

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Hong Kong
United States
Staffing
Work overtime rather than hire new employees
Hire temporary, part-time, or contract employees
more than regular employees

Reduce hiring new regular employees
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Hong Kong
United States
Rewards
Base pay performance based No minimum wage lim
itation Cash mentality Private medical insur
ance
Bas pay job based (is moving to performance
pay) Focus on benefits bonus Have minimum
wage limitation

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Hong Kong
United States
Development Training
Government has centred its policies around
training development activities.
Higher levels of in-house training and formal or
ientation programs were found in HK firms
Low expenditure on formal and informal training
Professionals and managers receive more training
than skilled crafts or production workers
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Hong Kong
United States
Employee Assignment
High functional flexibility Low financial flexib
ility High external numerical flexibility (firin
g/layoff is common, low union)
High internal numerical flexibility
Low functional flexibility Moderate Financial f
lexibility High external numerical flexibility
(firing/layoff is common, high union)
High internal numerical flexibility
Employee Competencies
High specific skill people High education workfor
ce from China increasing
Education do not prepare people for work
20
Hong Kong
United States
Hong Kong
United States
Employee Behaviors
Long-term commitment Trust between employees
employer
Low organizational commitment Low trust between
employees employer
Employee Motivation
Not so willing to sacrifice personal live for
making more money
Willing to sacrifice personal live for making
more money Companies use the economic crisis t
o retrench performance
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Hong Kong
United States
Shareholder Investor value
Moderate transparency CEO not responsible Listin
g controversial
High transparency CEO responsible Listing well c
ontrolled
Organization value
Chinese firms Jews of the East Money as religio
n
Foreign firms Follow host country
Fulfill multi-stakeholders
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Hong Kong
United States
Customer value
Moderate customer right More on relationship (ban
king)
High customer right More on needs (banking)
Employee value
Materialistic, entrepreneurial
Attracted by basic salary, merit pay, year-end
bonus, annual leave, and mortgage loan.
Attracted and retained by train development,
flexible work schedule, above market pay,
competencies, and group incentives
23
Hong Kong
United States
Strategic partner
Employee involvement high and for the improve of
productivity. 76 company willing to share financ
ial information.
Relatively strong union.
Employee involvement low and for the improve of
moral. 1 company willing to share financial info
rmation to employee.
Very weak union.
Society value
Depend on Government open and laissez-faire M
ore intervention through law and training.
Strong government intervention.
Companies value community as one of the
stakeholder.
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Hong Kong
United States
HR Linkage to the needs of the firm
Traditional Chinese Firm By following instructio
n from the boss. Acted as personnel manager
mainly. Foreign Firm Mentioned about strategy a
lignment but no details. HR planning is mostly us
ed for control and coordination purpose.
Strategy HR management is highly recommended with
precise steps of application in about 20 of
Fortune 500 firms (Nkomo, 1986)
The strategy-focused organization
The HR scorecard Human Resource Champions
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Hong Kong
United States
Transfer of HR Policies and Practices
Barriers
Short term vision in employer and employee.
Culturally reluctant to delegate authority, and
to take individual initiative.
Highly integrated HR systems. Short term vision.
Historically bureaucratic organizations.
Facilitators
Historical bridge between East West.
Open government policy. Poor HR system less bur
eaucratic structure.
High unemployment rate.
Open government policy. Academic research. Respe
ct to diversity. High unemployment rate. Global
competition.