China is famous for low cost production and that’s why many multinationals are searching for

Chinese talent for developing production in their countries. Chinese organizations want to utilize
strategic human resource management as a core competence. But Chinese organizations feel
trouble of using both traditional HR system and modern HR system because of the complexity of
Chinese organizational culture. Then finally it is decided that management by values (MBV) in
its triaxial model, can be a suitable policy for SHRM development in China. MBV is also known
as “Value based of management” or (VBM). Most organizations in China think MBV as stairs
for success. This article is focused on the introduction of traxial MBV concept and improving
SHRM by utilizing this model.

Economic situation and SHRM system in China:

Chinese economic condition and side by side SHRM system was changed by experiencing
different management techniques, doing research on SHRM and also because of continuous
changes in situation in China at different times which is discussed in the following-

• After leaving monopoly market, China joined Private Owned Enterprises (POEs), and
Foreign Capital Enterprises (FCEs) and together with International Joint Ventures (IJVs).
The importance of these factors such as customer’s demands, in the need to work in
teams, and in the general rise of the level of education among Chinese employees is
increased. Private companies decide to involve in MBV. Strategic development was a
crucial factor at that time because of finding competitive advantage in HRM and also for
multination who are looking for expanding their business. In 1977, the transformation of
higher education system in China was taken place and large numbers of highly educated
young workers have entered the labor market. So an alternative HRM model was required
to effectively combine international and national talents, reducing the global and local
HR tension.

• An American model known as “Best practices” in management is accepted by HR

employee around the world. As China was entering in global market, so HRM practices
was a necessary factor for them. So they started practicing more general functions of
HRM such as recruitment processes, regular performance appraisal procedures, position-
based payment, training system, benefit–based payment, followed by incentive payment,
employee proposal and information share, career development, and job analysis. But
these practices were not suitable for them because of external factors.
• Because of the rapidly changing in economy, China started to practice two managerial
techniques. One is internal which is from their own country and another one is external
which is imported that means hiring tactics from western countries. For building strategic
capability, China started to minimize HR cost by utilizing the labor market. Besides this
they are also strengthening their organizational innovative capabilities. They wanted to
connect traditional values and western value systems and create a modern SHRM system.
So complex situation is created, when they want to implement together with the
traditional control style of HRM model.
• Inside out theory also contributed significantly to the development of SHRM theories.
 • There are three kinds of cultural studies and they are Universalistic, Relativistic and
Complexity.

MBV:

MBV was first introduced by Garcia and Dolan (1997). This is further development model of
Management by instructions (MBI) and Management by objectives (MBO). This model is
used for developing sustainable, competitive and more human cultures. MBV consists of
corporate mission (business philosophy), the corporate strategy (courses of action to achieve corporate
mission and purpose), corporate governance (who determines the corporate mission and regulates the
activities of the corporation), the corporate culture, corporate communication, organization of the
corporation, decision processes and systems, performance management processes and systems, and reward
processes and systems.

MBV triaxial model:

Triaxial model indicates three core factors in organizational culture. These factors are economic
– pragmatic axis, ethical – social axis and emotional – developmental axis. In this model MBV
does not count economic values but integrate emotional and ethical values to reach stability and
agreement between the individual, organization, and society. This model indicates that the values
at individual, firm and societal levels are suitable or inappropriate and how their performance is
transformed through leadership and learning.
If we see above figure, we will understand that even if ethical, economic and emotional values
are similar to different level such as society, firm and individual level but these factors are
interrelated through learning and leadership. A leader needs to take care of his people and should
not take advantage of his position. Personal qualities such as character and virtues create ethical
effects in society. Economic values are important for the firm because of creating financial value.
If financial value fails, then the firm will be finished. Individuals who are working in the
organization should be satisfied by fulfilling individual and social needs. Work and life values
should be considered in order to maintain a balanced and healthy organization. Learning means
that individuals are get trained from the organization and utilize their knowledge skill individual
level to firm level also in society level.

Innovation, sustainability, and consciousness-

Innovation is the key to get competitive advantage in global business environment because
employee’s innovative behavior and creativity adds more value to the success of the organization
and this will improve financial performance of the firm. The results of innovation comes from
positive emotional values.

Sustainability is an important issue in SHRM. Firms are now using corporate social
responsibility (CSR) to sustain social and humanity’s long-term survival and this investment may
benefit the financial performance of the firm.
Consciousness of individuals in organizations and firms means to increase members’ sensitivity.
For example managers could be able to behave more ethically at individual, firm and social
levels in their decision making.

At last we can say that by adding triaxial model with MBV will create a beneficial point for the
firms. According to the article this concept will enhance strategic perspective of human resource
management in China. This MBV triaxial model is very necessary for the growing industries and
firm in China. For example, this model can help to make social relationship-based organization’s
positive climate.