Global success needs leaders fit for the role at state enterprises, say experts
Getting the right people in the right positions is one way for enterprises to succeed, but this is easier said than done for state-owned enterprises (SOEs), due to the government’s dominant role in leadership appointments.
Now experts have called for reform of the appointments system to help improve the firms’ competitiveness in making inroads into global markets.
The mainland’s 116 SOEs are managed by the State-owned Assets Supervision and Administration Commission, which also appoints top executives to the enterprises. The appointment system allows senior officials to swap between SOEs and government bodies.
The practice has been criticised by Zhu Boshan, general manager of Tacter Consulting in Shanghai, who says that operating an enterprise under such a bureaucratic practice “is an obstacle for SOEs to improve their efficiency”.
Zhu, an expert on SOE reform, said some senior executives in the sector were only concerned about building a personal image and short-term achievements and did not care about the long-term development of an enterprise. “Unlike the situation in private companies, you can’t dismiss them even if they are unable to achieve decent results or pass assessments,” he said.
Xu Hongcai, deputy director of the information department of the China Centre for International Economic Exchanges, a government think tank, said a posting to a well-paid SOE position could be “compensation” for an official’s contribution to the government over many years.
Under such an appointment system, executives appointed to run an SOE might not be the most capable and might not be able to seize opportunities, said Xu. The lack of transparency in top executive appointments also demoralised other staff who felt they were sidelined in the process.
Reforming their shareholding structure could be a solution, Xu said: “The proportion of government shareholding is too dominant.” SOEs should introduce more private and institutional investors such as the national pension fund, he said.
“Institutional investors seek returns on investment and they will be able to put pressure on those top executives,” Xu said, adding that a reward and punishment system would help remove incapable executives.
Zhu said the boards of SOEs should be reformed so that directors could eventually take over the responsibility of making executive appointments.
SOEs’ initiatives to “go global” also put them under pressure to reform their staffing systems, Zhu said. In addition, China’s construction sector could soon peak, making it necessary for state firms in this industry to seek overseas business opportunities. Against this background some SOEs have been criticised for competing with domestic private companies, adding to pressure on them to expand overseas.
To be globally competitive, SOEs needed overseas talents who are more familiar with international standards, Zhu said. “But the current appointment system is unable to find and place global and high-end talents.”
Robert Parkinson, chief executive of RMG International Business Consulting in Beijing, said many prospective candidates in Europe and the United States were keen on employment opportunities in China, but the culture was too different.
Going global would be more difficult for SOEs if they are run by people who are not really suitable, Parkinson added. “To make it bigger overseas, you need people in more countries. And reform is mandatory.”
Read the whole article: http://www.scmp.com/business/china-business/article/1133371/call-reform-top-state-firms
It’s hard to find a Chinese woman, or a woman anywhere for that matter, who exhibits the Thatcherite demeanour of Britain’s ‘Iron Lady’. However, if you scratch beneath the surface you might find an iron hand in a velvet glove. Also, when we compare communications between Chinese men and women, we find men tend to lead the conversation in a strong way and women tend to listen and have more interactions. Chinese women are very good at staying focused on their goals with laser-like precision. In particular, the female’s performance will be resolute when they have to make tough decisions.
The notable second aspect of having female managers is that they are great multi-taskers with high procedural ability to execute. Scientists say that women have an ability to think in a three-dimensional way and their brains can easily deal with many different tasks at the same time. On the other hand, it is said that, men have a ‘lateral’ way of thinking to deal with one problem at a time but with a greater degree of focus. There is another set of data from Grant Thornton’s report that may prove these characteristics even better: Of the executive management positions occupied by women in China, most are COO (Chief Operating Officer) or other types of organisational roles with 45% of the positions and the least occupied role (by women) is that of the CEO occupying only 9% of those surveyed.
Most Chinese women are natural team workers with a high ‘EQ’ (Emotional Intelligence). As well as the inherent female genetic aspects of EQ, Chinese society and the local systems of family and education have encouraged this aspect of Chinese females because traditionally, girls in the family are trained to be the helper, supporter and backbone of the family unit. Therefore, they feel very comfortable when being involved deeply with other team members. In addition, the Chinese lady is known to be very humble and modest. Namely, they are taught to control their emotions very well in different situations as a woman. ‘Emotional Intelligence’ is the ability to identify, assess and control the emotions of oneself, of others, and of groups. Women in China are often educated more than men on this subject by their parents.
Indeed it’s amazing that the above features of women match the modern business needs so well. In fact, not enough effort is placed on promoting and developing the unique contribution women have to make in the modern Chinese business world and the preciousness of the male still overflows into the corporate world.
Every coin has two sides. Your biggest advantage could be a disadvantage to you as well. The stereotypical education of the Chinese lady is also about training women not to be pleased by external gains and not be saddened by personal losses. This concept makes most Chinese women unable to understand their own advantages and position themselves properly within the social or corporate situations. Female leaders who have succeeded still have to be faced with social consensus of the criticisms and accusation for what they have done. Those who are unable to undertake these pressures tend to escape easily. As a result, females sometimes encounter a career bottleneck. In response to this, the HR practitioner could create a special training system for female staff to help explain their unique position and how to get use this to their greatest advantage- both in their careers and in the management of their business. Some successful women in their companies could be the best candidates for a coach, for example, this is might also be a way to build self-confidence for shy Chinese women. It may be a useful thing to do (for an HR Manager for example) to invite the CEO or equivalent to express encouragement towards female executives openly and regularly, (in a form of ‘positive’ discrimination!) Women also tend to be more sensitive (in particular to language according to the G.T. study) than men and these small gestures could help build small eco-systems whereby women have a greater level of equality than in the overall society, which is of course very good for their sense of self-worth.
Secondly, HR departments may take family-related factors into consideration when helping female staff to plan their career paths and setting-up 
