Australian and Vietnamese managers

Berrell et al. (1999), in a study of the management behaviour of Australian and Vietnamese managers within the same organization, found significant differences as to how these individuals handled management issues.


Compared to their Australian counterparts, Vietnamese managers were more accepting of hierarchical and formal management structures; more collectively-oriented, putting less emphasis on individual actions and achievements; less willing to accept change; more focused on harmonious relationships at work; more likely to voice differences subtly rather than openly and to view disagreements as too confrontational; less focused on actions, (King-Kayanui, Ngoc, and Ashley-Cotleur, 80)

While these significant cultural differences should prima facie require different approaches towards financial incentivization, independent research reveals that organizational competitiveness is also closely related to organizational type rather than cultural background  and is evinced by private sector companies being far more competitive than their public sector counterparts across a broad spectrum of countries with different cultures.

Another issue relevant to the preparation of performance schemes is organizational size. Small companies tend to be less hierarchical than larger organizations, with decision making being dependent upon the individual judgment of owner mangers. Staffing is influenced by individual likes rather than employee capability. Smaller organizations, on the other hand, tend to be less bureaucratic, more profit oriented and faster in decision making.

Preparing incentivization programs for manufacturing SMEs in China will need to take account of a number of specific variables that include country culture, organizational culture, the size of organizations, the profitability and performance of individual firms, the nature of the industry, existing remuneration mechanisms and performance appraisal systems, and the likely effect of various levels of performance incentives. 3. Planning of Performance Incentives for SMEs in China SMEs are playing an increasingly important role in the microsoft strategic analysis.

Various private and governmental figures state that their numbers, production figures, and employment capacity are growing at an astonishing pace. Chinese and foreign experts estimate that SMEs are now responsible for about 60% of China's industrial output and employ about 75% of the workforce in China's cities and towns. SMEs are responsible for creating most new urban jobs, and they are the main destination for workers laid-off from state-owned enterprises (SOEs) that re-enter the workforce.

(Zheng, 127) With studies conducted in Vietnam indicating the effectiveness of performance incentives in increasing production, (King-Kuanei, Ngoc, and Ashley-Cotleur, 81) it would be logical to expect that they should, because of broadly similar cultural influences, also be applicable in China. A recent HR study on Chinese industry reveals the effectiveness of four HRM practices, namely performance-based pay, participatory decision-making, free market selection, and performance evaluation in performance.

(Zheng, 129)  Performance bases incentives in China’s SME sector can work, as elsewhere, through commissions, piece rate pay, and performance bonuses. While the worth of performance incentives is slowly becoming evident, as can be gauged by the substantial amount of discussion on the subject its incidence is still very low, in fact much lower than what exists in the neighboring countries of SE Asia.

Many SMEs were previously state owned, where the concept of pay differentiation was virtually unthinkable. While economic reforms have aimed to change the rigid provision of social welfare system and to replace it with an incentive performance-driven pay system, staff and workers, particularly in the state-owned or affiliated state-owned enterprises, are still entitled to obtain social welfare benefits bestowed by the state.

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