AM Lecture 2

Sinoelectronics - Case study

Lewis (2002) carried out a study of personnel practice at Sinoelectronics, an SOE but part-owned by a foreign investor.

Sinoelectronics manufactured consumer electronics to a mostly domestic market.

It had five plants, 7,000 employees and 80% production-20% management employee structure.

Lewis questioned employees to get an idea of the dynamics of the company and came to the following conclusions:

He observed that employee involvement in the company was very weak
Trade unions dealt with welfare, not pay and conditions
A web-based bulletin board for staff comments was set up, which revealed (anonymous) criticisms of senior management. They were accused of abusing their position, such as claiming spurious expenses and finding jobs for friends and family. This shows how aware the workers were of the corruption within the company and that they had no respect for authority as a result
Managers were thought to be poor at interpersonal communication
Upward and downward communication was difficult or non-existent
There was a general acceptance of some element of corrupt commercial practice in Chinese commercial life
There is little evidence of overstaffing and little expertise in staff selection, indicating that HRM was not developed
Managers were constrained by a pay budget which emphasised welfare benefits
Weaknesses were found in communication between managers and employees
There lack of expertise in HRM as a result of the legacy of the IRB employment system

Corporatization was not going to improve the situation if the firm was still dictated to by the State.