Dynamics of Decision Power in the Localization Process - Book Report/Review Example

Article Critique At the outset it is worth beginning the article critique to begin with a very wise (and humorous) quote from the genius Lewis Carroll in his very famous work "Alice in the Wonderland" to illustrate the difficulty faced by authors of large pieces of work in keeping their work in context and relevant while at the same time being able to estimate their own direction and stance in relation to the research. Would you tell me, please Which way I ought to go from here" "That depends a good deal on where you want to get to," said the Cat. "I don't much care where -" said Alice. "Then it doesn't matter which way you go," said the Cat Struggling with the same issues of direction and context this article, "Dynamics of decision power in the localization process: comparative case studies of China-Western IJV's" reviews the International Human Resources Management issues and how they have impacted on the transfer of HRM facilities by Multinational Corporations .The emphasis is on whether normative host country practices can be internationalised particularly with regard to International Joint Ventures in relation to examples from the experience of four Chinese International Joint Ventures. Like most of the research agendas of IHRM researchers the writers have tried to tried to present human resource management in the context of organizations and their environment as well as with in the context of changing economic and business conditions. Before going further it would be useful to briefly discuss what HRM or IHRM is all about and why are its policies a matter of immense academic debate. Human Resource Management is an intensely a strategic initiative for the creation of the best possible work environment for a company's employees and is strongly focused on the personality, skills and development of the company in order to help contribute to the growth culture and thus a bright future of the company. The aim is to determine the best ways to compensate employees and keep them motivated, and employ measures like rewarding them for regularly exceeding goals and making productive contributions towards company growth. Human Resource Development (HRD), initiatives are responsible for improving employee activities through supplemental training, career development, and organizational assistance. Effective HRM will seek to ensure a safe work environment for everyone.(that is to protect employees' physical safety by caring for the work environment and preventing injury or illness).HRM will also focus on employee rights based on the legal framework of the jurisdiction on matters pertaining to employees' rights and responsibilities as well as measures concerning strict anti-discrimination and sexual harassment policies. In the article at hand the writers try to cover the dynamics of both the local and global business context in which the firm operates should be given serious consideration.(i.e. the external social, political, cultural and economic environment; the industry, the firm, the sub-unit, the group, and the individual.) The researcher follows the case studies/practices of four Chinese case studies and examines how they contribute to Westernized, localized or hybrid HR practices. This article was chosen for the critique over three others because of its comparative comprehensiveness with regard to Sino HRM practices. The author felt that when choosing this article what was impressive was the its well-defined conceptual framework, detailed data collection and description of subjects, researcher subjectivity, and a thread of transparency that ties all of the sections of issues with each other. Yet the critique will expose areas where the study might not be as robust as it could be. The conceptual framework provides a thorough history of the conception of HRM practices. However there were quite a few things about the article which were to need more thoroughness. For example it was felt that the summary/abstract insufficient and I felt that it does not address the competing points of view of other academics/professionals. For an article of almost twelve thousand words a hundred word long introduction hardly seems appropriate. It can be argued that less is more but the unknowing/browsing reader is not being helped here particularly with the highly technical/ and abbreviated introduction. While assessing whether the hypothesis (or proposal) has been stated and is closely related to the topic of the research paper it was felt that there was a significant information gap as the author did not state the basis or methodology of study. My hypotheses evaluation found that the ordinary non-technical browser interested in the article would have little to interest in this regard. A similar opinion can be given about the keywords which could have been more detailed. At times I found certain sentences unconvincing. The introduction states that "The extent to which the practices and processes of human resource management (HRM) can be transferred from one country to another has been the subject of considerable debate." Firstly this proposition lacks one or any references and secondly it does not do justice to the rest of the article. When the author does go on to state references they interrupt the flow and purpose of these sentences. However the author does come around to stating the purpose of the research article at the end of the first introduction of the paragraph when he says that "This research explores sources of decisional power and influence in Sino-Western IJVs and examines how they contribute to Westernized, localized or hybrid HR practices." In my opinion both the sentences quoted above should have formed part of the abstract. The introduction is not very eye catching and is at its best an over referenced piece a better part of which should have formed the part of the abstract. Also it does little to help the non-technical reader understand what is being studied, and the reason for choosing this topic and does little to indicate the direction of the research.. The main body of the article does little to address where the introduction ends and where the main body of the article starts. Anyways if my assumption of where the introduction ends is correct, then it is an awfully short introduction and as scattered as the abstract itself and should have been longer and more comprehensive. Now coming to the Research methods applied here. It would be useful to assess whether the author has clearly described an appropriate justification for their use provided The aim of the four case studies seems to supplement the proposition highlighted in the abstract i.e. "Partners to the IJV may wish to impose their own practices, and use contractual and non-contractual resource power, internationalization expertise and operational consistency requirements to gain relative decisional advantage". Before embarking upon an analysis culminating in a critique it would be useful to discuss the aims and intricacies of research based on academic opinion. Research is a fact finding activity (Dominowski, 1980). The aim of primary research is to make known something previously unknown to the readership and to advance human knowledge by making it more certain or better fitting; the aim remains to supplement a previous proposition or make a new one.(Elias, 1986). Infact in this regard Kerlinger (1970) uses more technical language to define it as the systematic, controlled, empirical and critical investigation of hypothetical propositions about presumed relations among natural phenomena. It would be useful to assess the research philosophy being used in this article which is a main influence on the methodology of research. (Saunders 2000).Popular literature is dominated by two competing research philosophies playing an important part business and management research (Saunders, 2000). Positivistic paradigm Phenomenological paradigm Tends to produce quantitative data Tends to produce qualitative data Uses large samples Uses small samples Concerned with hypothesis testing Concerned with generating theories Data is highly specific and precise Data is rich and subjective The location is artificial The location is natural Reliability is high Reliability is low Validity is low Validity is high Generalises from sample to population Generalises from one setting to another Figure 1: Features of the two main paradigms (Hussey and Collis, 2003) Based on the above discussion it would be useful to assess the research philosophy dominant here (as it fundamentally depends on the research question Saunders 2000), the phenomenological philosophy has been chosen in this paper. It seems therefore that the author is developing a theory as he/she comments upon the analysis of the data. Qualitative techniques stand in contrast to quantitative techniques, the main difference being that quantitative techniques involve numerical data whereas qualitative techniques involve more abstract information. Data collected using qualitative techniques do not generally lend themselves to statistical analysis whereas quantitative techniques do (Veal, 1997). In relation to qualitative designs, Punch (1998:p.150) has suggested that sometimes research work may contain a combination of elements pertaining to two or many of these approaches. In case of this article although there is no specific heading for a literature review the early parts of the research paper do identify the key themes and previous relevant research here by mentioning recent and old authors like Adler, 1991; and Schuler et al., 1993 as well as Wilson, 2003; which means than an ample use of peer reviewed journals has been made. The author makes clear the previous position i.e. where no difference was felt between IJV's and MNC subsidiaries. The tensions of adapting to the cultures and practices of the parent subsidiary are well illustrated however the 'head-office' driven entity approach is neither endorsed nor criticised at this point. The literature review demonstrates with the use of appropriate referencing how the practices of the IJV meet an internal tension when faced with pressure to adopt practices that are identical to the so called hegemonic 'parent' (Geppert and Clark, 2003).The writer(s)makes a good point in the realistic differences of opinion and the , "Tensions between both groups of shareholders and between foreign shareholders and localized business systems, and attendant expectations, suggest that hybridized or mixed practices may reflect the relative power of parents as well as the host-country socio-legal environment." The writer(s) has made a thorough mention of the literature in relation to the 'new institutionalism' approach"(see Powell and DiMaggio, 1991; Westney, 1993) and the connection between MNC's in their context for HRM operations. At this point the writer(s) states the objective of the research thus which I feel again should have formed a part of the abstract. "Our research proposition is that HR policies and practices in IJVs result from the relative power and influence of the IJV partners, and that their power bases are a function of the interaction of: (1) resource power (contractual and non-contractual; tangible and intangible); (2) internationalization experience; and (3) embedded consistency requirements." The research context is well stated on the other hand in relation to these three parameters behind decision making and the literature supporting their role is discussed accordingly. However the writer(s) seems to ignore literature supporting the proposition that Chinese practices have become increasingly Westernized although the writer(s) does admit that this has happened. There is a danger that this may be a rather one-sided proposition then. The writer(s)has insisted on his proposition that the Chinese HRM is still distinctly different from that in OECD nations/western MNC's and does give all the literature in support however. Coming to the methodology involved here the writer(s) intends to draw up a framework of qualitative factors which will assist him in determining what kind of an IJV can have more influence on HRM subsidiarity.In the model "Table 1 Chinese 'Iron rice bowl' vs. Western HRM" the writer(s) highlights the dense political undertones that is the Communist/Capitalist divide that so characterizes this tension within HRM models. Thus the writer(s) has chosen a rather qualitative approach in this regard and assesses how the factors of HRM standardization and localization are constructed and interact, qualitative case studies of IJVs and the founding partners appear to be the most appropriate research approach The writer(s) makes a case for the use of Case studies in this regard to enable a "richer" understanding. However such an approach utilizing handpicked case studies cannot be deemed to comprehensively offer a conclusion as to the neutrality of this article and it has been discussed further whether these studies have been appropriately chosen. The choice has been made of four companies two of which belong to large scale manufacturing and two in financial services for their data available for a three year period, 1999-2002. There is an element of quantitative research as well whereas the writer(s) have conducted semi-structured interviews of 1-2 hours with a structured sample of up to 20 employees, including department managers, HR managers, the CEO, CFO and Vice Presidents. The sample was structured to include informants representing the three parties, Western partner, Chinese partner and IJV. Also utilized are the archival data records pertaining to the companies' policies, decision-making procedures, internal reports and external reviews to build additional points of comparison. The writer(s) does something very commendable while admitting that interviews were not originally conducted in English and that there mite be lingual and contextual differences.Of particular interest is how the Authors have justified their selection of the case companies which they identify as "companies which are long-established enterprises with well-established corporate cultures, infrastructures and management practices. In all cases the MNCs held between 40 per cent and 50 per cent of the equity stake in the business (no more than 50 per cent was available to foreign partners, and the governmental preference was that no more than 49 per cent be in foreign ownership)." In this regard what is impressive is that the writers have pointed out the following points about their subjects i.e. The sites are all in large urban areas, which do not present significant infrastructure or labour market challenges to the founding and development of the IJV. All subjects (IJVs) have Anglo-Saxon (US or UK) partners and Chinese partners, without other national representation, so inter-cultural complexity (and comparison) is simplified. They have also made it clear from the onset that "Western" denotes a discussion of the Anglo-Saxon MNCs. However the above considerations have a danger of making the case study model too simplistic. Here again the discussion slips into the political undertones of the argument pertaining to the apparent of "hostility" of the IJV to the colours of their MNC parents.The beginning of the discussion of the Case Studies involves the discussion of the quantitative and qualitative data pertaining to four companies labeled as MAN1, MAN2, FIN1 and FIN2 to analyse their HRM trends over the past decade. The writers have some interesting conclusions to make for MAN 1 when they identify that despite the equality in the IJV's involved here the western counterpart does demonstrate a marked superiority and the pressure of a better bargainer.They also make a good point of identifying some of the adopted practices by these Chinese enterprises like online job applications, structured interviews for selection, and performance appraisals that are not purely formative, but play a role in the determination of pay. In relation to the MAN 2 the writers note the high level of Sino influence over the setting up of the industrial and commercial means, the recruitment and training of the staff' (JV document) were carried out in the context of the Chinese partner's existing policies, practices and workforce and they conclude that the HR practices of MAN2 are distinctly hybridized. They note how the "social systems were remarkably resistant to change, and still dominate key aspects of the employment relationship, resulting in a far more hybridized system than the Western MNC experiences in any of its other locations." Coming to the two models pertaining to financial services in relation to FIN 1 the writers note the lingual and cultural differences for the actors who find it frustrating at times. The parent company in this case was faced with management clashes which involved violence and subsequent financial losses. Surprisingly in this case the main control was in Chinese hands within the joint venture and this is in start contrast to the position in MAN 1.My criticism in this regard pertains to the factum of comparing a manufacturing company with a financial concern where the authors point out that there has been an "equal exercise of decisional power"here. The authors seem to resent any power in Chinese hands as they believe that lack of Western MNC representation on the board or in the senior management denotes unfairness.My view is to the contrary.The Chinese company requires a significant participation as the stakeholder at risk here.It does not only have its money involved here but its land and labour force as well so I would like to disagree with the point of view of the learned author here and sympathize less with the outsider MNC which only has its capital at stake and not its own country's economy.In relation to the FIN 2 the writers have identified a much more balanced Sino/Anglo relationship in terms of whether Joint Venturers are equal in terms of equity holdings, as well as equal non- financial resources. The HR culture nevertheless remains strongly deep rooted with in the regional .social infrastructure and professional networks. Based on this discussion it can be said that the aims and objectives of the discussion have indeed been identified fairly clearly although I would disagree with the subtle political(communist/capitalist) undertones inherent in some areas of the review.I feel that the method has been identified with all the data identified and explained but somehow what is doubtful is the choice of case studies in terms of their neutrality.However the author could not find (based on the above and personal observations) whether the description for gathering data too detailed but it was felt that the data is sufficient for a replication study.The writers seem to have done well with the interviews and literature review here to aid them in the evaluation of the industry by taking a review of the research done in the past. Ideally a literature review will normally comprise of the important information from documents of similar nature relating to the field of research, so documents should be selected from the set of documents having useful information regarding the research topic. They should be selected from a variety of sources such as journal article, newspaper reviews, experts interviews, information available at Internet. In the review each document should be referenced properly and the key addressed points should be summarised.It was felt in this regard there is not much lacking in the article except the few pit falls that could have been avoided.There fore I will now move on to the evaluation of the analysis of this methodology. Next the issue is whether the data analysis methodology has been accurately explained and whether the analysis is accurate. Being a novice researcher although the author is in a position to comment fully upon the accuracy of the data analysis however because no raw data has been annexed to the article and secondly we will have to take the writer's word for the interviews and perceptions of the employees. All these matters pertain to limitations of research.However once again the critic would like to commend the writer's confession of the lingual gap in the information (the interviews being in Chinese). There is indeed a full discussion of the findings of the manner however it was felt that the tables representing these findings did not exactly do justice to the text explaining them and the terminology within these tables was confusing.However the writers have been successful in getting their point across pertaining to the diversity of these four Case studies and the varying contributions in each one pertaining to the development of the JV and systems as well as the balance of decisional power in each one and then they have gone on to discuss the relative advantages and disadvantages of each set up/balance of decisional power as a "decisional driver" and based on that suggest that "Where the decision power is balanced, hybrid systems may develop. Thus, we might expect MAN2 to have relatively Westernized HRM policies and practices, FIN1 to have localized Chinese HRM, and the remainder to exhibit hybrid systems that may still 'lean' toward the preferences of the stronger venture partner." Conclusion The Literature view and findings cite numerous references of previous research describing general and specific factors affecting HRM policies and decisional power within joint ventures from an international perspective. Finally the paradigm issues in regards to methods for gathering and indeed the ways of treating data were discussed earlier on in the methodology section of the article. This provides the reader with a feeling for the approach to which the researcher values and thinks about investigating the HRM issues and cultural practices within joint ventures. The study has its significance and it can be said that it has originality within it. The writers test out their theory of the reluctance of the oriental/communist structures to adopt to western HRM practices. The pragmatic potential benefit of this study is mentioned in the introduction i.e. to be better able to identify the source of difficulties faced by HRM in the execution and operation of joint ventures which involves juggling a plethora of cultural and lingual considerations in decision making as well as who gets to make these decisions.A rather lengthy paper is presented after the summary of findings. This article is also significant for further future research in terms of its methodology; which albeit briefly mentioned in the abstract, is an attempt by the authors to validate the methods used and if the reader can find the analysis of the data agreeable to his own views this would form a good sort of guidance for their conceptualization of the problem and understanding of any solutions therefore. Also based on this perusal it can not be said that the introduction was well organized and clear because its layout combined the literature review with the introduction. This made it difficult at times to distinguish between the empirical studies which form a historical context and the current academic opinion that has led the researcher to formulate the specific research questions. At times I felt that the literature lacked depth and laid too much emphasis on the data analysis of the four hands picked case studies. On a more positive note an analysis of the bibliography reveals that there is a marked emphasis on primary resources and empirical studies even though few details are given. Although the well referenced lay out of the review amply supported by tables and diagrams it was felt that the there was a lack of an element of surprise as there was a marked predictability of the results and as well as the approach to be adopted for the data analysis.I found the conceptual framework for the study clear, but a lack of a convincing stance in the literature review to make this study necessary. As far as the methodology is concerned (based on my discussions above) I felt that the population/interviewees were described adequately(that is the workers and managers of the relevant undertakings).Also I felt that further description of the population would be useless as we were more concerned with their views and interviews.But the danger of it all is that less details would cause the reader to keep wondering where the interviewer is "coming from" that is their mental state of mind which could have a bearing on the issue of varying views by the subjects.The interviews have not been described in detail(in terms of queries etc) but it can be said that this does not exactly make the interviews biased.However the author did find the method of selection unclear particulary with regards to the so called "random interviewees". Last but not the least we are concerned with whether those interviewees gave biased responses It is felt unlikely, but maybe because of lingual and cultural differences or even mere politeness it would seem that the interviewees were not speaking their mind.For example if the interviewer was from the West they would feel shy in showing their resentment to infiltration of Western practices into their work culture.It would have been beneficial if the interviewer and his/mode of language and dealing and anonymity was also clearly defined. In conclusion whereas the article can be praised for its originality and its promising role in aiding future research certain of its aspects are politically overstated along with some structural pitfalls as discussed in the main body of the critique. ________________________________________________ References Berger, P.G. & Ofek, E. (1995). Diversification's Effect On Firm Value. Journal Of Financial Economics, 37, 39-65. Cohen, L. 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