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Introducing Western Organizational Cultural Norms to a Developing Country Organization (China)
The Bank of China needed to implement Western human resources policies in order to remain competitive. The Bank was able to implement changes in areas not subject to government policies—and HR is engaging its new role as business partner rather than administrator.
The Client:
Bank of China (BOC), one of three of the largest government Banks in China with over 200,000 employees, located throughout all the China providences as well as Branch offices in the U.S., Europe and other countries in Asia. With China becoming a member of the World Trade Organization, and faced with increased competition from western financial institutions, the Executive Management Team recognized the need to increase their understanding of how western organizations operated with a specific focus on managing their human capital.
The Challenge:
The culture of the BOC was very traditional, with a majority of the management team at all levels coming from the military which forced a very hierarchical, bureaucratic, non-confrontational environment among the employees (i.e., following orders, loyalty, and respect were the core values of the culture).
In addition, employee recognition, reward and benefits were all tied to tenure and government policies (e.g., life employment), not to performance, and therefore there was little to no motivation to meeting or exceeding performance goals by individuals, which was becoming increasingly frustrating to newly hired, young employees whose opportunities now also existed with foreign financial organizations expanding their operations within China.
Solution:
BOC’s CEO, who was educated in England, recognized the need to change the culture within the organization. He believed that one of the key areas that needed to be reoriented to the ways of western organizations was the Human Resource function by introducing the HR staff to new ways of thinking about their responsibilities, and supporting them in developing new HR programs and processes.
Working with BOC’s Head of HR and the Senior Training & Development Manager, the initial request focused on a week long training program in Beijing for all the senior HR staff (approximately 80 individuals – none of whom spoke English) coming from all of the key BOC locations across China and the U.S. Based on discussions with the Development Manager, the initial request was modified in two key areas:
- Rather than focusing on upgrading/modifying current HR practices, the emphasis of the training would be on rethinking the role of HR and its ability to play a more influential role in changing the culture of the organization.
- That in addition to training members of the HR Function, management also needed to appreciate and understand the need for cultural change if BOC was to continue to be competitive in an increasingly changing business environment.
Results:
The Program that was implemented was made up of three components:- One week training for the HR function
- One week consulting to individuals/small groups of the HR professionals that attended the training session which focused on real issues in which they were involved and helping them develop solution strategies to address them
- Two day modified version of the week long training program presented to BOC’s Senior Management
The emphasis of the training/consulting was focused on the partnership that needed to exist between the business managers and the HR function. It was HR’s responsibility to refocus their activities from just administrative support to an understanding of the current and future business needs of the organization so that they would be prepared with programs and processes to support the efforts of the business units.
Management concurrently needed to view the HR function as a key component to their business success by including them in their business planning efforts in order to ensure that HR was aware of what plans existed and could play a proactive role in ensuring that the right resources were available and supported at the right time through various initiatives and programs.
Based on the redefinition of the role of HR, the Head of HR began to rethink his organization structure and to focus on the need for new/different competencies within the HR function in order to fulfill the “business partnership” role.
The CEO was briefed on all of the activities that had taken place and approved the change in emphasis of the HR function.
Learning:
- While there was overall acceptance by the HR function to refocus their efforts in order to play a more influential/exciting/interesting role within the organization, they needed to recognize that this change would take time for acceptance on all sides, that many of them did not possess the skills to effectively play the partnership role and therefore would need to develop new competencies, that the change being recommended was very significant given the current culture of the BOC and would continue to need the support of the CEO in order for it to take place.
- The Senior Management team had a very mixed reaction to the proposed change in role for the HR function. At least in part, much of the mixed reaction was due to a lack of preparation by the CEO with his senior managers in communicating the need for change and his support for this new direction.
- The more traditional senior management group, who tended to be older/long tenured, fundamentally did not agree/understand for the need for change. As far as they were concerned the support they were receiving from HR, which was totally administrative, was all they were seeking and were not interested in any outside input to the running of their business units.
- The less traditional senior managers, younger and better educated, were very supportive since they recognized that they needed help in recruiting, developing, and retaining key resources now that the environment had become much more competitive and the prestige for working at a Chinese Bank was quickly disappearing.
- Some of the changes supported (e.g., meritocracy) were outside the control of the BOC due to government controlled policies such as life employment and benefits linked to retirement. Until the government was willing to allow for more independence as to how organizations would be allowed to operate, some of the recommended programs (e.g., Performance Management) would be limited in their effectiveness.
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