Business Management Systems in China - Coursework Example

Business Management Systems in China Introduction Different countries advocate a distinct or a mixture of business management systems that are best believed to hasten the economic development. There is an inevitable and reciprocal relationship between the business management system and the economic growth of a particular nation. Accordingly, this paper focuses on Chinese Business Management System (s) to reflect on the Asian business management systems. China is rated one of the key leading nations that lead the global economy at the moment together with German and United States of America. Therefore, the China’s economy is ranked a rapidly emerging and hence foreign multinational corporations are critical contributors to this observation. The country is no longer merely viewed as a place for cheap production but as an increasingly promising marketplace based on its business market systems that are supportive of business operations. To this end, the economic development of China has primarily focused on cost competitiveness as well as the adoption of foreign developed technologies and innovations (Siu & Roger 102). The economy’s global impacts have resulted chiefly from its massive scale. However, the Global Financial Crisis marked the onset of a new period in China’s economic history. The nation can currently no longer depend predominantly on foreign consumption as an engine of economic growth. Moreover, China has developed domestic consumer markets and orients its production towards such domestic markets. In addition, the ever rising wages portray the China’s economy as unlikely to continue its growth by being the factory for several world’s simpler commodities (Yu &Hendrik 45). Body Chinese should transform to US Model Going forward while moving up the value chain, the country has begun to develop a management system particularly a culture for the technological and product innovation. The nation business management systems anchor on the fact that the more freely the business people exist in the country, the increased likelihood of innovation just for US models. The country business systems are thus focused on providing adequate and appropriate knowledge to its young population at younger ages to facilitate innovation as this challenges the norm. However, the country business management systems are keen never to overstate the democracy-innovation nexus. This is because, other nations as German and its Companies have portrayed an innovative spirit long before the country being a Democrat. Thus, democracy must never be rated as a prerequisite for innovation. Accordingly, China has clearly understood this part of history with respect to the correlation between innovation and democracy and thus potential good news for the present China. However, when comparing China and Germany with respect democracy and innovation, it should be stated from the onset that Germany initially had assets prior to democratization unlike China (Lin 56). Such assets included firm engineering tradition as well as a strong compliance with the rules of law and a rapid rising emphasis on intellectual property rights. Therefore, this greatly rewarded risk taking and innovation. Despite, China’s present lack of engineering and legal tradition relative Germany as well as the essential ingredients in the innovation formula, it is already mapped globally. Accessing the Role of Culture in Developing Management Systems China is keen on respecting the role of culture in developing management systems. The country has high power distance and long term orientation. The high ranking for long-term orientation in China is an indication of a country that respects and preserves the tradition of designing its management systems (Chang 72). China thus places a high value on education as well as training and at the same time inclined to surpass the barriers of culture in developing management systems with time. Moreover, individualism in China is ranked lower relative to any Asian country with respect to the development of management systems. The country has a strong collectivist mentality that sets a precedent as individuals are responsible for colleagues within their respective groups defined by the hierarchy (Khairullah at al. 43). The Confucian philosophy plays a role in China’s management system particularly, a hierarchy that is deeply woven in the country. Therefore, in China, the relationships are deemed unequal and hence the inequalities are highly honored. Therefore, are granted respect automatically from the younger population and this is reflected in the management systems where promotion is based on seniority and lifetime employment rather than performance (Lee at al. 42). Therefore, the decision management in Chinese firms is driven by respect, hierarchy, discipline as well as evasiveness. This culture help avoids the conflicts at all costs regardless of the wrongdoings within the upper management with respect irrationality of the decisions made. China vs. USA The comparison between USA and Chin’s business management system with respect to innovation and technology development reveals that USA has higher management systems than China. The USA gives the knowledge that harbors innovation amongst the young population earlier as they believe that innovation is bound when knowledge is instilled to young ages as compared to waiting for adulthood. On the other hand, China and the many Asian countries see the lack of observance of hierarchical values as the cause of problems of the West. They believe that such problems as the twin Western diseases of moral degeneration as well as the anarchic idea that a person is important as compared to the class he belongs ruins the United States of America business management system development and implementation. Therefore, China management system tends toward the directive where senior manager gives instruction to their direct reports and such people further pass the instructions down the chain of command. Therefore, unlike USA it is never expected in China that subordinates question the decisions of superiors. The Chinese management systems will perceive this as disrespect and hence the immediate cause of loss of face for all concerned. Therefore, China showcases a lack of good-quality managers who are experienced as those available are so expensive relative to the Western Standards (Conte at al. 67). USA managers are always father figure who expects and receives loyalty as well as obedience from fellows. Accordingly, the manager takes a holistic interest in the well-being of the colleagues leading to a mutually beneficial two-way relationship for effective management systems. Comparative Management Models Some of the comparative management models discussed in the paper is Farmer and Richman Comparative Management models and Modified Koontz Model for Analyzing Comparative Management. According Farmer and Richman model focuses on the impacts of the external environment to a firm’s management practices. The Model identifies the essential elements in management process necessary in evaluating firms’ operations in various cultures (Chang 84). The models describe the key environmental factors that influenced management practices, as well as the managerial excellence. Therefore, the model highlights educational variables, economic variable, legal and political variable as well as socio-cultural variables as the constraints to management. Thus, enterprises only succeed through non-management factors but excellence in management ultimately creates the difference between continued decline and success. On the other hand, Koontz’s model is categorized into enterprise activities managerial and non-managerial. These categories are the casual factors for enterprise excellence. Moreover, non-managerial activities are affected by the appropriate underlying science or knowledge in similar manner the managerial activities are affected by the relevant science or knowledge. Also, either activity are affected by the availability of material and human resources as well as the constraints resulting from the external environment. Koontz’s model thus is accurate and realistic as it views environmental factors both opportunities and constraints rather than as purely constraints. In essence, the model holds that environmental restraints are always opportunities in certain conditions. Therefore, China’s managers must adopt a global perspective in leading business enterprises. This is achieved by embracing the Koontz’s models that is effective in the identification of factors leading to managerial and organizational excellence. Relationship between Shareholders and Mangers There are always owner-manager conflicts in China with the previous studies concluding that the connection between firm performance and executive compensation is weak in China than other developed markets. There is, therefore, a conflict of interest between minority shareholders and controlling shareholders that has always hampered the adoption of incentive payment schemes in China (Zhang at al. 49). For example, such Chinese firms with concentrated ownership, the private benefits have been recorded from controlling shareholders. The benefits arise from the controlling positions such as self-dealing transactions like transferring assets from the listed company’s members or selling assets and other commodities (Cheng at al. 56). Therefore, there is an urgent need to control the manger-shareholders collusion in China to ensure that the interest of the firm is put forth. Disadvantage and Advantage of lifetime employment and Senior-based Promotion Promotion strategy adopted in China business managements reflects that of lifetime employment and seniority. The advantages of this strategy is that each that has stayed with the organization for a considerable time must get promotion and this is a key driver to employees motivation leading to increased productivity on the part of such an employee. However, such a strategy may never create impacts on the entire productivity of the firm as well-performing employee may feel discouraged if underperforming colleagues get promotion on mere seniority and lifetime employment (Jean-Noël 29). Nonetheless, such promotional strategies are also effective in harnessing respect amongst the employees to their seniors and hence reduce conflicts in the organization. Works Cited Chang, James. Business Process Management Systems. Beijing: Auerbach Publications, 2006. Print. Cheng, Peter, Jack L. Li, and Wilson HS Tong. "What Triggers Top Management Turnovers in China?." Journal of Contemporary Accounting & Economics 4.1 (2008): 50-87. Conte, Vincent A., and Daniel Novello. "Assessing leadership in a Chinese company: A case study." Journal of Management Development 27.10 (2008): 1002-1016. Jean-Noël Gillot. The complete guide to Business Process Management. Raleigh: Lulu.com, 2008. Print. Khairullah, Durriya HZ, and Zahid Y. Khairullah. 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