Managing the Chinese workers (Part 2)
2. Nepotism
The next most common issue is the nepotism which the local managers are developing to strengthen their position and security in the company. This is least understood by expatriate managers as the scale of the nepotistic network is obscure and they do not bother to find out the relationship of the employees to the hiring managers.
It is very common to find kinship among the Chinese in every place. You have “Little China” dominating the Los Angeles Chinatown and “Little Taipei”, which used to control the Chinatown two decades ago, had been driven out to another district. In a same factory in Guangzhou, you will find the “Shandong Gang”, “Hunan Gang” and “Dongbei Gang” working in separate groups on the production floors. Because of clustering of gangs, you can easily incite brawls and fights among the gangs as each of them have their preferences, distastes of others, protective over their gang members and wanting to be “The Big Brother” in the factory.
During the old days in Singapore, we had Canton Street, Hokkien Street, Hainan Street, Teochew Street, etc each denoting the clan from China staying on the street. In the 1960s, it was not unusual for Chinese did not cross path into the wrong street in fear of being attacked by the opposition clan. One of the objectives in introducing “Speak Mandarin” campaign by the government since early 1970s is to lessen the clan identity and to promote harmonious coexistence among the Chinese. We strive to form a common identity among all Chinese.
Nepotism has been in China since the dawn of her history. The generals would trust only their soldiers from the same clan and position soldiers from other clans in a more dangerous maneuver or mission. The ministers in the court would also bring in their gangs to safeguard their positions. And Guangxi is the foundation block binding all these relationships and self-interest. Though nepotism is common in every country, I find it is more widespread and domineering in China.
Thus it is not surprising to find local managers, including HR managers, wanting to hire their friends, relatives and people from the same village or clan in the company. They want to build their power base for the following reasons:
A. Ease of management
Speaking their own dialect and coming from the same village or town give them the rite of passage to join the gang. I have seen how supervisors easily get their workers from the same gang to follow their orders. Work is carried out without questions. The gang members are loyal and obedient to their leaders; much more than to the company or executives.
On the positive side, you have more productivity and cooperation with such group undertaking the tasks on the production floor. However it will turn to your disadvantage when adversity to the group interest emerges.
B. Ease of corruption
Because of the bondage and loyalty, members hardly report to the management on fraud and corruption committed by the group. They would lie to hide the truth when confronted. Betrayal is scorned off or intimidated by others. Thus the group feels secure in committing the crimes as members are expected either to join in or stay mum.
A production or purchasing manager will place his people in the purchasing, warehouse and production so that they can easily remove properties or cheat the company. Sometimes they also place their cronies in the quality and engineering departments so that the approval of suppliers lies in their control.
There was this case where a production manager was trying to save job for a storekeeper who was found falsifying his time card. A further check had revealed that the storekeeper was introduced by the manager and complication came in as the store often lost its inventory.
C. Forming power base
This happens in every organizations and countries. Not only the department managers use it to achieve his personal interest but also to fend off or attack his rivals in the office politics. Sometimes the manager is so powerful with his supporting base that the company encounters difficulty to terminate or transfer the manager.
This is bad for company development as too much resource would be committed to deal with the infightings. Also the dominating group may redirect the company to wrong goals or directions which serve its interest only.
I have known one HR manager putting cronies in various departments to strengthen her position and also to make her expatriate boss believed that she has kept everything in control. Her cronies provide the grapevine in the company and also pose a threat to other department heads. In return the cronies get better increments or job opportunities; and thus create resentment among others. It is rumored that she cut a deal with the manpower agencies and transport companies on commissions. She has been nicknamed “Empress Dowager” by those outside her circle.
D. Establishing Guanxi with others
Often managers encounter request from business associates, relatives and friends to employ someone related to the requesters. A thornier situation is when a senior government official requesting employment for his son or daughter. This is all part and parcel of Guanxi establishment in China. As long as the employment does not lead to conflict of interest or creating power play, it is a lesser problem to be handled with. One must take care not to increase the size; otherwise a new nepotism is evolved. Some executives tactfully transfer the employment to other division or company which they have no personal interest in. This is to avoid complication or suspected cronyism in his division.
E. Job security
Needless to say, one secures his job by putting his friends and relatives around him. The cronies will carry out his orders and complete the tasks. And this makes him competent in the view of his superiors. Also the power base will fortify him against his rivals and secure his position in the company.
Though the nepotism is common in other countries, but the scale and depth is lot larger that most expatriate managers could realize. It is less transparent as the local managers will not acknowledge their relationship with the new hires. Sometimes it goes to the extent that a nephew is forbidden to address his uncle in the work place for fear of their relationship being discovered.
Thus it is crucial for the top management to stipulate hiring policies to avoid nepotism. Avoid hiring big group from a certain county and also group the workers by virtue on skills, education and job types instead of allowing the supervisors to group them according to the clan they belong to.
Promote company social events and activities which stresses on interactions among colleagues. Workers must be constantly informed or educated to serve the company interest. Their destiny depends on the well being of the company.
General Manager must be aware that all pay increments and promotions are handed out by merits and in a fair way. A well established employee performance appraisal is not sufficient. It is good to implement key personnel appraisal where all the employees are put together to be appraised by the managers. This will reduce the chance a manager hope to get the best for his people.
Contrary to common practice, do not encourage the supervisors and managers to introduce friends and relatives to the company. Though it will put more pressure to find workers, but the avoidance of nepotism, which generally leads to corruption, is worth the effort.
Though it is difficult to avoid nepotism, the management must constantly demonstrate its willpower in stopping its development. And the objective must be made known to local managers that the company has zero tolerance on nepotism.
Nov 11 2009