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China and UAE: Management Analysis Report


Introduction

The development of management theories highly depends on observations and mathematics. The latter is used to elaborate mock-ups for business activities. Management practices appear as results of numerous case studies that are based on the managerial experience of coping with various workplace situations. It is important to understand the benefits of different managerial practices and make the best use of the most efficient models (Wang & Zheng, 2013). On a bigger scale, it would minimize the number of employees who quit because of weak management practices. Usually, poor management increases costs and disregards the employees’ capabilities. To understand the essentials of management, business owners should distinguish between good and bad managerial practices and conduct personal research to elaborate on an exclusive business model (Wang & Zheng, 2013). It will positively influence workers’ productivity and eliminate joblessness.

Of course, we should take into consideration the fact that management theories are recurrently exposed to serious limitations including independent variables such as human behavior. The issues are habitually different for different types of businesses, but the majority of them revolve around human resources, technology, and financial resources (Wang & Zheng, 2013). On the other hand, poor management may become the premise of poor managerial behavior. This naturally happens because managers rely on their personal experience and not on the business objective and up-to-date state of affairs. Nonetheless, it should be noted that businesses profit the most when they apply novel management theories when starting a large project. Models that cause a slight decline in productivity for the sake of uniformity are one of the most popular management theories currently available to businesses all over the world. The most efficient management practices are based on research and case studies and work best for casual businesses (Wang & Zheng, 2013). The track record of a certain management model provides evidence regarding the fact of whether it will work or not.

One should take into account the dynamic and flexible nature of management practices and carefully apply these practices to a business within the framework of a certain project (Wang & Zheng, 2013). Both the UAE and China are represented by mixed business models and management practices. Flexibility is required to sustain the peculiarities of each of the business models. Business development elicits leadership qualities and helps to define new elements of management theory. This paper will investigate the key features of China’s managerial practices, compare them to the managerial practices typical for UAE, and make conclusions concerning the efficiency of both countries in terms of management.

Overview of the Regional Area

Political Environment

China’s political evolution can be characterized as market socialism. This country is a representation of a unified unitary state as it is entirely governed by the Chinese Communist Party. This authority has a great influence on the structure and philosophy of the country (Wang & Zheng, 2013). The State Council possesses significant powers and is the ultimate organizational body of the country (even though the Chinese Communist Party is responsible for the implementation of numerous important measures as well). It is also safe to say that China is exposed to some political risks. Chinese administration is considering the likelihood of industrial nationalization (which has already taken place back in 1949).

Moreover, there are several specific risks which include expropriation, repossession, contract negation, and currency inconvertibility. China’s political environment is influenced by inadequate insurance limits which cause several additional issues. Numerous employees in China are exposed to extortion and personal harm. The political environment is also exposed to the risk of the constant conflict between the provincial government and the country’s central government (Wang & Zheng, 2013). They fight over the pertinent laws and their proper execution. Therefore, the companies that operate in China face the issue of misunderstanding and potentially misinterpreting the local rules.

Economic Environment

In terms of economics, China is a renowned player in the worldwide economic arena. The country plays a critical role in international affairs. The wealth is unevenly distributed among the coastal provinces and the remaining regions. The industrial sector is considered to be the keystone of China’s GDP, and the agriculture sector is the runner-up (Wang & Zheng, 2013). Large businesses owned by the state also majorly subsidize to the economic success of the country. The economic landscape of the world was ultimately transformed when China was named a member of the World Trade Organisation in 2001. China creates economic opportunities for some Asian countries as well. Arguably, the experts name China the catalyst for world financial expansion.

Even though China is considered to be one of the most powerful countries in the world, it still suffers from several issues. These drawbacks include insufficient communication, poor transportation, and lack of energy resources. China’s key objective is to create a high-class infrastructure and equalize the human development index (currently, there is a serious disparity between urban and rural areas) (Wang & Zheng, 2013). As campaigners for human rights claim, China suffers from torturing and executing hundreds of people annually. The country is also exposed to corruption and deterioration of the environment.

Historical Environment

In contrast with the Western and European worlds, modern Chinese history started in the late 1850s. China was enforced to engage in trading activity with European countries. Nonetheless, Westernization became the defining characteristic of China as the country was required to choose between its traditional values and new Western ethics (Wang & Zheng, 2013). Another important event in Chinese history is the Revolution of 1911. This revolt discarded the monarchical system and became the founding stone of the short-term democratic government. Nonetheless, the effects of the victory were rejected by the Chinese bourgeoisie, and the country crossed the threshold of another period of domination and oppression (Wang & Zheng, 2013). Starting in 1949, China switched to a Communist government that guaranteed stability, economic growth, and reform policies.

Cultural Environment

Despite the complexity of the Chinese culture, numerous specialists unanimously agree that certain characteristics are present within the diversified Chinese cultural environment (Wang & Zheng, 2013). Confucian philosophy is ultimately considered to be the core of Chinese culture and identity. It is safe to say that Confucian philosophy directs the Chinese and it is hard to terminate its impact on society (even taking into account several generations that were a part of British civilization). Some values are considered to be central to Chinese culture. These values include the family (the family as a whole is preferred to its members), the development of principles and self-discipline, tiered nature of social life, and the significance of heavy labor and accomplishments (Wang & Zheng, 2013). Collectivism can be considered the definition of Chinese culture and society.

Microanalysis of the UAE and China

Managerial Practices in China

China may be considered the source of novel management approaches. The majority of enterprises are not afraid to experiment and implement Western managerial practices (Kerzner, 2016). Nonetheless, China still has to prove itself as an efficient user of Western management practices because most of the Chinese businesspeople are known for merely being wealthy and not for the fact that they implement innovative management ideas. Still, the number of management practices applied by the Chinese is growing unconditionally (Gooderham, 2013). Chinese managerial practices are not able to compete with the Japanese practices such as total quality management or just-in-time approach. That is why they chose another route and emphasized the vital significance of improvisation, receptiveness, speed, and flexibility. One of the key findings concerning Chinese managerial practices suggests that private businesses earn more than state-owned enterprises (14% versus 4%).

Throughout the last three decades, Chinese enterprises had to deal with an unstable business environment. This is why they were able to elaborate on different management approaches. Business in China is perceived as an evolving ecosystem and not a restrained representation of state capitalism. The companies should be able to be level with uncontrollable growth and significant economic declines (Gooderham, 2013). On the other hand, China is hit by immense urbanization and aggressive rivalry in addition to the pervasive display of corruption. It is safe to say that the management practices applied by businesses are closely related to the economic state of the country and China is not an exception. The vision of Chinese enterprises involves the pledge of stability and complex structurization of the business. Therefore, managers should be able to deal with several business dimensions simultaneously. Chinese enterprises employ fast-changing approaches that do not restrain the business and allow the company to process the information promptly. This ultimately helps the managers to act independently and describes Chinese corporations as highly energetic units that possess high-class agility.

The professionalism of the managers can be considered to be one of the main constraints of Chinese companies’ growth. This is why the businesses are focused on motivating managers and eliciting employee commitment. For the most part, Chinese businesses are known for creating opportunities for the employees and their families. They also mastered the processing of diverse resources including governmental assistance and major financial subsidies (Kerzner, 2016). All these aspects of the business are taken into account to develop personal relationships and minimize the bureaucratic impact on organizational goals. Another point of the Chinese approach to management is that managerial practices at the majority of the organizations are similar to the practices that are used to manage the state.

This can be explained by the dislike for private companies displayed by the Chinese Communist Party. The majority of the private companies had no access to internal resources, and it caused stagnation. Even though currently Chinese businesspeople are still limited by several certain licenses, they have learned the ways of applying a systematic approach to their businesses (Kerzner, 2016). The situation in China is also similar to Darwin’s research on how species are subject to respond to environmental gravities. Due to the complexity of the Chinese corporate environment, numerous businesspersons are not able to respond to the pressure. The survivors, on the other hand, learn to adapt quickly and become more experienced in terms of showcasing their managerial talent and competitive disposition. This is a serious advantage, and Chinese managers understand the significance of this peculiar fact.

China’s Exclusive Managerial Practices

Thorough research on the subject showed that several managerial practices are characteristic of Chinese companies. The majority of the companies were found to prefer the organizational structure based on Confucian postulates and value the mentality and effectiveness (timing). Everyone should comply with the organizational hierarchy and avoid instability (Warner, 2014). Chines companies that are referred to as first-class businesses are characterized by open-minded vision and willingness to experiment. This helps the businesses to discover innovative management practices and leadership techniques.

Simple organizational structure

The key feature of Chinese businesses is that they are naturally controlled from the top. Nonetheless, the hierarchical structure is met not so often due to the popularization of decentralization. This method is applied to allow the companies to be flexible enough to respond to the fluctuations of the market and update their product mixes (Warner, 2014). Needless to say, the businesses in China are required to adapt to the constant changes in the market and realize the differences inherent in the managerial processes implemented at both local and international levels. This factor became the key premise that predestined the appearance of exclusive structures based on the principle of autonomy. A rather interesting managerial approach is applied at Midea. This Chinese manufacturer employed a structure that consisted of several independent units and not just parts of a bigger company (Warner, 2014).

Consequently, each business unit is managed separately and the leaders have the authority to construct new factories and manage the workforce if needed. This approach helped Midea to go away from the theoretical effectiveness of synergies and concentrate on the importance of corporate responsibility and autonomy. One of the features that can be considered characteristic of this managerial practice is the duplication of the workforce (meaning that Midea has the opportunity to hire twice as more employees as any other company). This particular decision may be supported by the well-known fact that the salaries of Chinese employees are lower than of employees in any Western country, and it means that Chinese businesses may hire more people for less money (Warner, 2014). The development and maintenance of this managerial approach are connected to weak Chinese infrastructure, and it is only logical that businesses require an extra workforce to develop and increase profits.

Research shows that the majority of Chinese businesses follow Midea’s example and decentralize their companies. Ultimately, this leads to the appearance of simple but effective structures. There are numerous examples of Chinese companies that are comprised of some mini-companies (Wang & Zheng, 2013). All the departments are organized in a way that allows them to function independently and this is where Chinese businesses majorly differ from their Western rivals because the latter believe that multi-line reporting is the key to the organizational success and mitigation of the risks while the former tries to evade complex structures and focus on efficiency and benefits (Warner, 2014). Therefore, Chinese managerial practices are aimed at prompt expansion and growth that does not depend on the costs. On a bigger scale, Chinese businesses are used to rely on improvisation rather than planning and consider that scaled low-cost approaches are the key to success in both local and international territories.

This managerial practice was developed to assist Chinese companies in two ways at the same time – performing efficiently and developing at a fast pace (Wang & Zheng, 2013). This means that businesses in China are keen on launching new brands and obtaining more resources while elaborating on innovative business models. Therefore, Chinese businesses need two autonomous managers who would responsibly monitor both performance and commercial development (Karataş-Özkan, Nicolopoulou, & Özbilgin, 2014). Chinese managers are known for their conflict evasion methods as they focus on cooperation and reporting. The shift to cross-organizational roles is seen by Chinese managers as a more effective way to improve performance than hiring more people. The majority of Chinese managers improvise when making decisions but have a certain tactic when it comes to hiring employees. They prefer risk-taking candidates who wish to work for enterprises that are owned by the state (Warner, 2014). The biggest problem with this approach is uncontrollable employee turnover. Also, the majority of the companies are not ready to provide any training for their employees and do not want to invest in talent preservation.

Localized value schemes

The Chinese market is currently suffering from no-name brands, inexpert customers, exceptional local traditions, and undercapitalized companies (Wang & Zheng, 2013). Therefore, in the Chinese business environment, compliance with local traditions is very often synonymous with the definition of quality. This is why businesses may make poor choices when it comes to serious business decisions because they strive to operate every day of the week instead of operating efficiently and qualitatively. Similarly, long-term fixtures are not a prerogative for Chinese businesses as they prefer constant remodeling to durability (Kerzner, 2016). The key point of localized value schemes is to capture value using realizing the need and wishes of the customers. The implementation of this approach means that the business will have to adjust its practices to the government and, most importantly, local customers. This strategy is successful with the majority of the resident buyers and is expected to develop even more before the end of the 2010s (Warner, 2014).

Chinese businesses are used to rely on privileged admittance instead of durability. In the end, the companies are required to keep their promises and manage their investments. The core objective of the Chinese businesses can be defined as the ability to provide the most service (while they may be building low-quality products and poorly distribute their production). This managerial practice presupposes that the manager knows a lot of people and has some critical business connections (Warner, 2014). Numerous multinational rivals took a diametrically opposite approach but failed. The strategy of localized value schemes gave birth to numerous scalable businesses and allowed the Chinese brands to represent the country in the international arena.

Quick production development

When it comes to the speed of developing new products, Chinese businesses often impress the world with their methods of using the existing technologies. The presence of Chinese businesses on the market is robust and perceptible as their key goal is to dominate and force their rivals to engage in the battle (Wang & Zheng, 2013). For instance, Goodbaby International Holdings easily outruns its contenders by introducing approximately 100 innovative items four times a year. Local dissimilarities in the sense of taste also require fast-food chains (KFC China) to develop and introduce more food items per annum (beating even their counterparts from the United States). Another point that played an important role in the design of a quick production development strategy was the willingness of the Chinese businesses to manufacture the goods that were not initially on the company’s roster. The ability to produce prompt prototypes and adapt to the customers’ demands became the decisive factor (Warner, 2014). Chinese management is based on the use of materials that are not expensive and modifications that improve the performance and cut costs.

This flexibility of the majority of the Chinese businesses allowed them to become the manufacturing cornerstone for several companies overseas. Their experimental approach to management popularized low-cost Chinese factories and opened numerous new perspectives for both local companies and their partners (Wang & Zheng, 2013). On a bigger scale, this approach is rather beneficial and helps the companies to develop new product designs effortlessly. There are three core values followed by the adepts of quick production development. First, they are focused on buying cheaper resources from China and making the final production steps using advanced overseas technologies (Warner, 2014). Second, this strategy involves lean management and tolerates the business investing in sourcing companies that are not controlled by the corporation. Third, this approach is based on the direct collaboration of Chinese businesses with their associates. The key concerns of the businesses that apply this approach include environment and factory-built units, and the production speed.

This managerial practice is also inextricably linked to the use of a redesigned modular approach. In this case, the businesses are required to certify the increased ability to manage different fragments of the item at different stages of the production process. This means that new details could be added to the item straight throughout the manufacturing process without harming the final product (Cooke, 2012). In other words, all of the production units should have the feature of backward compatibility and allow the developers to change it at any given moment. Quick production development relies on the competencies possessed by industrial professionals specializing in the downstream approach. For the most part, it does not take into consideration customer knowledge, the creation of new technologies, or a deep perception of marketing (Warner, 2014). This happens because the Chinese businesses are at the beginning of their commercial path in terms of attaining new managerial design capabilities.

Several critical points differentiate Western companies from their Chinese counterparts. While multinational companies usually divide their engineering and manufacturing practices, Chinese businesses strive to collocate them (or at least keep them close). While multinational companies possess more resources and can develop new technologies, Chinese businesses are ultimately forced to reverse-engineer the original product or purchase formal licenses (Wang & Zheng, 2013).

The most important difference between multinational and Chinese companies lies in their attitude towards human resources and process design. While multinational companies are interested in minimizing the number of production steps and cutting labor hours, Chinese businesses prefer mid-level engineering and manufacturing processes that do not require expensive approaches and are based on the employees’ willingness to work (Wang & Zheng, 2013). A perfect example of quick production development managerial approach is the situation when Apple was forced to redesign the iPhone screen in just four days. Its Chinese suppliers refitted the production line in a matter of several days and got the job done by manufacturing a screen that was better than its predecessor (Warner, 2014). This quickness is one of the biggest advantages available to Chinese businesses. Nonetheless, Chinese companies are often disparaged for the absence of inventions and constant imitation of famous brands.

Competent use of nonmarket approaches

The critical point of any business in China is the fruitful affiliation with the government. The majority of the successful Chinese businesses understand the organization of the state and its connection to other authoritative assemblies. The core objective of this approach is to approach the governmental executive in a way that would be mutually beneficial and reflect the interests of the officials. The relationships with major players are seen by the managers as an opportunity to access an extensive market, manage costs more efficiently, and take care of the tax duties (Gooderham, 2013). Sequentially, the government believes that the businesses will be able to support the economic state of China and increase its tax incomes. Therefore, the businesspersons are involved in the political process of the country and considered the new electorate. Despite the allegations and issues connected to the collaboration of Chinese businesses and government, this partnership is focused on problem-solving and not cultivating corruption. For example, a manager could easily strike a deal with the government, and the state has resolved his problems in exchange for the fulfillment of their requests.

Comparison of Managerial Practices

One of the key concerns of Chinese managerial practices is the development of custom approaches and modernization of the existing management models. Both local and central governments are indispensable. Chinese managerial practices target customers overseas and see partnerships with multinational companies as the key to success. This allows Chinese companies to establish robust internal structures. In turn, UAE managerial practices are based on the use of the approaches that were already implemented in practice. Nonetheless, the managerial strategies of these two countries are almost identical in terms of modernization and partnerships.

Management theories developed in China emphasize the importance of building companies from scratch. The managerial environment in China is affected by the powerful state that is backed by weak infrastructure. In other words, Chinese management is interested in investing in new industries instead of developing the outdated ones. Their managerial practices can be described as the willingness to discover new areas where there are fewer competitors (even considering the lack of experience). UAE management complies with a similar path but is committed to the past business experiences of the country. Managerial practices of UAE are aimed at the industries where a much bigger number of contenders exist.

Chinese management theories can be described as creative. Nonetheless, as history shows, their strategies may sometimes leave the citizens dissatisfied. The outcomes of the application of Chinese managerial practices allow to reduce the costs and increase the quality of provided services (Wang & Zheng, 2013). In China, a reputable brand is based on the effectiveness of its approach. The key feature of Chinese businesses is their ability to adapt to the context of the current state of affairs. Managerial practices of the Chinese businesses are rather similar to the practices that are applied in the United States of America. Overall, the current state of development of management in China can be characterized as the bottom-up growth, and there are a lot of things that have to be amended. In the UAE, management is based on personal values and high-speed development. Regardless of the Westernization of UAE, the country was able to preserve its vision of management and does not prefer profitability to human resources.

Conclusion

The development and application of different managerial theories are crucial. Numerous companies across the world are functioning by a managerial approach that does not correspond to the organizational requirements and the vision of the corporation. Based on the studied information, a conclusion can be made concerning the Chinese style of management and managerial approaches applied by Chinese executives. Their decisions are mostly influenced by modernization and optimization and take into consideration the effectiveness of the organization. China wants to conquer both local and international markets, and its approaches reflect the flexible nature of their managerial practices. In general, Chinese companies pay attention to the personal values of their employees, but profitability is their key concern in the majority of the cases. UAE, on the contrary, appreciates individual ethics and preserves the customs and traditions of the past while combining them with the modern managerial approaches. Nonetheless, the outcomes of the study show that there is room for improvement and both countries have to re-evaluate their approaches to perfect their managerial practices and accomplish organizational objectives without sacrificing any critical resources or performance.

References

Cooke, F. (2012). Human resource management in China: New trends and practices. New York, NY: Routledge.

Gooderham, P. N. (2013). International management: Theory and practice. Cheltenham, UK: Edward Elgar.

Karataş-Özkan, M., Nicolopoulou, K., & Özbilgin, M. (2014). Corporate social responsibility and human resource management: A diversity perspective. Cheltenham, UK: Edward Elgar.

Kerzner, H. (2016). Project management best practices: Achieving global excellence. Hoboken, NJ: John Wiley & Sons.

Wang, G., & Zheng, Y. (2013). China: Development and governance. New York, NY: World Scientific.

Warner, M. (2014). Understanding management in China: Past, present and future. New York, NY: Routledge.

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IvyPanda. 2020. "China and UAE: Management Analysis." September 13, 2020. https://ivypanda.com/essays/china-and-uae-management-analysis/.

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IvyPanda. (2020) 'China and UAE: Management Analysis'. 13 September.

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