Submitted By: Agam Sehgal

HRM Environment

Strategic HRM Human Resource Management

Personal Management
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Political & Legal

Economic

Cultural Union Conflicts

Cultural

HRM

Technological
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Legislature Political & Legal Executive Judiciary

Suppliers

Economic

Competitors
Customers
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Exploring and pottering (1949-1978)

TVEs had a limited role and were restricted to the production of iron, steel, cement, Chemical fertilizer, hydroelectric power, and farm tools. By 1978, TVEs were employing 28.26 million local labors and producing more than 49 billion yuan outputs.

SOEs
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TVEs
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Steady growth (1979-1988)

Farmer income was stagnating by the mid-1980s. Political requirements of local governments. During 1984-1987, the central committee provided a series of instructions, encouraging and financially supporting private enterprises.
In 1988, 95.95 million Labors, 701 billion Yuan o/p

In 1978, 28.26 million Labors, 49 billion Yuan o/p

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Land Reforms of 1978

A variety of governance and ownership forms appeared. 1. Responsibility system (2 out of 20): holds managers accountable for both the profits and losses of their firms. 2. Lease contracting (2 out of 20): to general manager

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3. Joint Ventures (3 of 20): All three companies were originally set up before 1980, and formed JVs in the 1990s. Objective: To enter into strategic alliances with foreign firms to seek foreign investment, introduce advanced production equipment, update products, and build up management expertise.

Resulted into =

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4. Joint Stock Companies:

5. Public Listed Companies: Bring public capital to meet the needs of the firm's expansion. Force the company to formalize its management and accounting systems.

Sales
10% Public 30% 60% Local Govt

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1. HRM functions The larger firms with more formal corporate structures tended to have more comprehensive human-resource function.

No of Firms out of 20 8 9

Level of HRM No HRM dept at all. Personal Dept.

Separate HRM Dept.

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2.

Recruitment: They recruited migrants as the line workers. The ratio was 3:7 (Local: Migrants) Due to the lack of professionals in the local labor market, they searched and hired on campus from reputed universities.

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3. Training and development

4. Reward system: Line Workers: Fixed salary with little or no bonus. Marketing Staff: Commission based. General Managers: a) Floating income b) Basic salary and rest at the end of the year c) Basic salary plus dividends.

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5. Social Security: Pre-reform scenario: ''guaranteed life-long employment and "cradle-to-grave welfare, labeled the "iron-rice-bowl. Post-reform scenario: While SOEs were deeply in debt with a vast amount of medical and pension obligations, TVEs provided very little social protection for their workers. Only when the 1994 Labor Law was implemented did TVEs start to abide by the minimum legal obligations.

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5. Party, trade unions, and worker's congresses: Either no trade unions or dominated by the State Party.

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Investment environment (1989-1991):

Lack of control of credit and government budgeting and social disorders. SOEs suppressed TVEs using their political advantages. In 1999, a 120 billion yuan credit relief operation was initiated to write-off SOEs inter-enterprise loans

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Stimulating export-oriented production (1992-1996)

Established Special Economic Zones along the coastal areas.. Adopted preferential taxation regimes. Cooperation between eastern regions and western regions.

By 1996, 135 million labor, adding 1.8 trillion yuan to output, exporting 600.8 billion yuan.
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Gradually declining growth (1997 onwards)

Declining Paradox: The TVEs Law, 1997. The 1998 Asian Financial Crisis accelerated such process. In 2003, the Central government enacted Promotion Law, aiming to save TVEs from practical financial difficulties.

TVEs

HRM Environment

TVEs

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The scenario of 2007

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The scenario of 2007

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The scenario of 2007

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Findings of the analysis:

Private enterprise contributed more gross revenue, but less tax. Limited Liability Corporations employed more workers, contributed more to value-added and productivity; Most of the TVEs are in manufacturing industry, on the basis of no of workers, value-added, total outputs and gross revenue, but it is the least profitable. Mining is the most profitable one; In Construction industry, workers enjoy more profit allocation.

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Positives

Negatives

1. The emergence of rural entrepreneurs and enterprises.

1. Large number of TVEs privatized and fragmented the industry.

by manufacturing

2. Provided massive employment, 2. Dominated industry. economic growth and narrowed the urban-rural income gap.

3. Hardly an outcome of any carefully 2. Labor intensive , government not designed policy or plan able to expand hi-tech methods all over the country. 3. Inability to identify the problem correctly.

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 Proceedings of the 2nd International Conference on Corporate Governance An Overview of Township and Village Enterprises in China during 1949-2009 by Yongqiang Li International Studies of Management & Organization, Vol. 34, No. 1, The Asian Financial Crisis: The Impact on Human Resource Management HRM in China After the Asian Financial Crisis Beyond the State Sector by Daniel Z. Ding, Gloria L. Ge, and Malcolm Warner

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